MSGM - Earnings call transcript Q1 2024

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Operator

Thank you for standing by, and welcome to Motorsports Games Inc.

First Quarter 2024 Earnings Call.

As a reminder, today's conference is being recorded. I would now like to turn the conference over to Ben Rossiter-Turner from Motorsport Games. Please go ahead.

Ben Rossiter-Turner

to Webcast. First welcome Conference XXXX and and Call you Motorsport Quarter Games Earnings Thank call Motorsport Beckley. today's Interim On is Chief Hood; Officer, Financial and Stephen Officer, Stanley Games Chief Executive the By should press filed after now, today quarter close. have to release everyone market XXXX company's access earnings first Motorsport This on the Relations www.motorsportgames.com. at section Investor available website is of the Games'

on or forward-looking and described securities During the its as whether meaning within and the result forward-looking laws. statements any and could these make company These statements statement forward-looking uncertainties undertakes of course required expectations from obligation a future events of to new cause statements. in update by may forward-looking this management's are law, risks involve call the actual or alter Except based U.S. beliefs differ call, federal as current those management this otherwise. made statements, update that of to on materially information, no to or results

to those today's quarterly report Please that actual recent in differ filings ended the certain XX-Q for discussion a SEC, Form forward-looking March today. implied from on results most press quarter the made cause detailed company refer materially risks XXXX, its on expressed for including release or could and XX, any to with statement

we In as first the discuss results. will such to refer call, XXXX as today's quarter we conference adjusted certain non-GAAP EBITDA measures, financial financial

press to non-GAAP earlier most other issued measures these You comparable of disclosures well measures the related release will a the find reconciliation today. as as directly in GAAP

Chief Motorsport Stephen? Executive turn to over of like call Games. the Stephen I'd now Hood, to And Officer

Stephen Hood

XXXX. today. in and be you talk you, about our for to call QX I'm pleased very to this here Thank everyone, joining to achievements conference

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we plans Le from biggest and esports games. core built services our place online to Mans, service of technologies, believe revenues in see games, one in complementary derive have pieces the events our we around finally and With rating the greater world, for the the

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development IT We have strategically certain prior best eradicated company put and repositioned cost licenses. control to chosen spending and the resolving measures, focus, relating unnecessary whilst team, enhanced in all liabilities around our place outstanding our

game, and are additive it anticipate in with more partnership core It our there We has we technology online coming FX expertise is that revenue have we been but several been which license easy to feel successful the and near-term to a a for rewarding of has believe Arcade not us for have that over recurring we Concepts all, course opportunities results and launched our Kindred focus, come. XXXX. potential revenue and

highly be to to risk of is ecosystem, of the all the growing heart innovative at Our a control which enhanced developer our and rapidly experiences, and publisher by is goal connected service.

the to XXXX. quarter about I Officer, Financial Beckley, invite first like financial Interim Stanley our for Now the results of talk Chief to would

Stanley Beckley

and Stephen, evening, you, good Thank everyone.

from I As our an the of calls, providing quarter earnings XXXX. financial be today. any offering the on I guidance update and wouldn't highlights results will Instead, focus with previous first forward-looking on

increase as drivers Revenues quarter XX.X% million, this in sales prior $X primarily up year. million were were was period by further the or a of Le release PC simulation February when third by of an increase. XXXX. in for for in development platforms Higher the $X.X the driven primarily the of of to same revenues game compared the This Ultimated earned digital through result parties. Mans game for the

an negative million, the $X.X million operating $X.XX lower develop was loss release year. decrease gross compared in for negative primarily year. when prior period The and profit net the in to $X.XX period and was driven quarter in the for $X.X by was the EPS additional higher loss of new improvement same the Consequently, games. to prior required same the quarter expenses to compared for Net

improvement of XXXX loss compared for The prior in first the of quarter for EBITDA adjusted of reported adjusted an adjusted of same million loss to year. $X.X in $X.X an well the decrease those We prior net same period in loss are period. the compensation in income million the the respect period EBITDA EBITDA the for as to as comparative the discussed as stock-based a are compared quarter year and change in

this to liquidity, area of focus company. it relates to continues a As be for the key

Net for used net approximately the for the million, burn monthly XXXX. operations million XX, million XX, cash $X.X monthly ended $X.X from cash cash in March XXXX, average months months ended of burn an was X X the operations when compared to March $X.X million average representing down $X.X of

in additional continue funding this to sales to to the be equity form similar actively and recent including, of in but In our or which cost address As not NASCAR had Strategic reduction and exploring our operations options, for restructuring the our new not the debt liquidity of cash company all you operations. we of fund year believe addition engagement that funding sale your will $X.X next initiatives. and additional March several and to, further shortfall, cash licensing XX, in limited of potential for our XXXX, interaction license in the to equivalents but time. assets of required is the over our of transactions. including Thank order million, to insufficient alternatives order financial business, we and are

remarks. call And Stephen the now to turn I for will back closing

Stephen Hood

last remainder and to would worked XX over and in this positive have agree in Le the you I but the the and Mans still you, our QX of is you'd We've June. Thank hard momentum. particular, in thank joining hope page go, you. result we've the turned the some Stanley, upturn today. months Thank excited results. have upcoming year event We're about We an way us and to those

Operator

will Jason [Operator first with question our take Instructions] Canaccord. from We Tilchen

Jason Tilchen

Congrats Ultimate. on the Le Mans strong launch for

remarks question you had I the on one think I gave there.

console may of Do list? game getting sort priority and I'm the look console the that launched? the terms the you have what of In does currently in-house time that sort develop what eventually like? like is look that Where curious line version capabilities to opportunity, of the of this on for

Stephen Hood

Jason, A it's Stephen. question. good very

development high that around the ensuring in with technical entirety. in external of the of the that but potential intent managed down now and have demanded externally. that things we in have been So I to much Mans and be leveraging earlier record one many There opportunity we think done what something I its partners should in I the that And of quality have we think is do these across focus, team we as and been space we've the team focus internally -- think right they a think and heading that console that wonderful can that the to in key our of know-how is certainly of and now to And clear is in develop bring development internal don't products some have the have go everybody partners level. lavishly -- time near-term the to to the resource the X things What I many, I would my ability console. have Ultimate has intend to come is Le to right bring are where to internally, I one really have that the kind of the remarks that that business. we Studio-XXX discussing

thing want don't entire of internally. managing I the expense So the

gives if your by to effectively in the utilizing do relying and think we I partners that color some cost on answer and space. to professionally you industry question. other it

Jason Tilchen

And Absolutely. Yes. the another touched on around thing makes remarks That in subscriptions. you the opportunity sense. prepared was

a perspective look well? into that hoping Le both of could dive control within between more is a sort sort the opportunity you maybe obviously, Just what in differences sort subscription you as Ultimate free bit Mans offered of a see of broader currently? from sort then would of, what of how sort And and the like little race

Stephen Hood

mean [indiscernible] conscious. playing the we've [indiscernible] I sure. that now is the of Yes, price made community are Mans Le to one commitments

attractive community think done gates point, a built and very with I a for of certainly very we've the wonders product sentiment. price us and come that's out attractive at positive

we're on things free the of One that intent providing is doing title. a still into the gateway

to kind any are very value if pay some and We entertainment It know and What get doesn't users, us of Ultimate, that We come make trying being to brick do even in Mans really that Le Le to sense product. they start confident more. in put the the the want attractive that of to they is experience front Ultimate. to entertainment to Mans back from is wall value of for we're ensure want proposition experiencing more users.

that time, and become groups win encourage And the that. the online, in trying which to person and young is one PC of console things only important and we're encouraging space, one the is where correct of in to to do states participate open we're common We're racing the not most in is That racing very really the enemies. play games together. probably can today, friends really groups trying of but to players compete

subscription tiers, the upsells of decided So and to recurring to participate opportunity. take this of is one of you you're if one these kind in willing

amplify of of We the team. a part are being to going sense

around available the employ of things one that if that the to of people AI become have a These will we're tell subscribe. systems group the will You in story you in your decides referencing to race. heard me looking some to the participation

than bigger and resource pocket of necessarily bigger the group at individuals. looking rather we're So a

the from want get people this making participate ways to requirement we are makes looking and of a subscription not if that very experience, trying to must-have innovative that we're online more sense. for but to make contribute at So a really

Jason Tilchen

Yes, year, is from year-over-year we we loss. in been just absolutely. already half terms the of the cost have sort the I that moves full of of curious just Obviously, of XXXX very the and the in helpful. in terms That's you sort the I'm in question obviously, where here? overall sort now a Is second a savings. one there saw what of, last on of moves the improvement relative last Or point of And of reflected improvement impact made significant cost of then then terms have made EBITDA net had to of we restructuring in fully are further in more performance? savings reached those saw savings in QX. the terms sort sort of of some financial

Stanley Beckley

take Stanley. one. this I'll Yes, This is

years restructuring think disclosed So XXXX. of mentioned, of our the had fully the restructuring I Form XXXX and some in end the we as program impacted U.K. development that QX realized by X that in well as benefit effect Australian we you employees we XXXX, XX-K, had

a this we're at for QX QX operating about than think $XXX,XXX, cash of I lower last point, significantly burn down of year. monthly to

at but business. do program, be expenses of benefits and we we where still [indiscernible] sense without the it's makes ways so, the realized restructuring I where look sort think of other to feasible can fully point, handling this continue that at we it to

Operator

Kupinski Capital Markets. We'll take with from our question next Noble Michael

Michael Kupinski

be DLCs when again available? Congratulations for subscription road service kind you will I games, -- quarters release. of be be would for me able release on particular? would quarter you was Like your and the identify what annual map . what if the in can those wondering of to Stephen, the review

Stephen Hood

piece coincide looking of with Le June. when in Well, Sure. to the content first key real event the is we're that and Mans arise, the

changes the map where that month XXXX for next and experience, stepping next far stone well, as the season season in is circuits Le reference the cars there. the looking heard Understandably, to and to possible, current is us are as and at the people in progress me driver road away you've new especially we has now, that of around and Ultimate their not 'XX be content audience are it the our But Mans So the whatnot. all. saying, we're calendar to watching product see want reflected the manufacturers support whatnot, coming as

piece looking first launch much June, ideally months, in online additional the we're X So packs. content X that's of comes in to or us and pretty for content

update after the categories So there new then we arriving current circuits we different at are 'XX season online. and more with and to start may June, content, the were get in car of new that, cars be we that to looking

year really the and entirety in circuit So cars of and for by us, corporates end ensure product. calendar the 'XX, of and of about the is the trying the conclude this that XXXX have we to

to an So variety urgency a It's a game months very when of great attracting think that people established really is for we time. of enormous there the There's terms coming content. not entirety of in no 'XX got amount offer came out the of if very, on in because be the But rolling we June the in X with have it over out. cars really new this And as content that limited there's in starts. very and we thin and players season.

about we're from start. weeks X So the away

Michael Kupinski

the Got when you do to you. subscription be launched? service And anticipate

Stephen Hood

racing We're a subject space reason. tends sensitive the service, Mans. it be think, for now. a in It I talk Le old post some Subscription starting to case of about very to is

this is the we For and ecosystem, that building We to we enormous audience not we so really spend have pushing the us, resources unnecessarily. know gain. as kind caused ecosystem this of into that own the

in for looking in that journey the July that part the we to this funnel do in like probably though the ecosystem and all expense. can August being you're you with story, next coming of in plugged or this. around subscription is invest a control, rose friends well into We and us. feel online your feel have features a as and we're as the online features for services so year. being superstars players Those come And really have experience

Michael Kupinski

has you the of the I for then give And into know months generally the I can long a there sales. wondering, how curve been sense of us second the tail . you. to just bell quarter? was sale is a Got

Stephen Hood

thought Le out We'd would of gate an Well, have title, originally, look, we early that knew we an existing it hard a access of the sell many, another Mans, gates, be away. access title. hasn't it video for in stormed place franchise was that based a out many had but on It just years. gain a actually us. not her the sport of for

Now we're expecting sales and dip Le heading understand as Mans. those we're that to

So out we we see ramps features, what over s drops and this time haven't being evening, product next occasionally peak improvements that been new next with the of injecting really the fixes off been because But is we it month. that injecting have with doing new and up content.

marketing So the is around we and the us vibe critical and we to the beneficial be general that's into going to be to expect. numbers expect terms the the that enormously at experience next for coming update, going of the in Mans player Le spike visibility, product us,

Michael Kupinski

[indiscernible]? I modifications And wondering content user creators. an games was you offer final are mods to opportunity then do just question, if in themselves my by racing for

Stephen Hood

Not Yes. Yes. space. question. the racing Good in

massively, rFactor titles For some dormant titles, a free that lifeblood in which by portfolio. ground. developers, you have experience content [indiscernible] encourage, new, got and to proactively that gap. this. the X some in content cleaner has on Ultimate that's fill user-generated elsewhere. we to giant probably i.e., that fresh content, because because the And gets time, content Mans make about Le user-generated past are standard, being lot But it's And amazing to legacy that's to as can And about terms they being for the a steam typically, users left a a long, mod been any tend some really a that consider history move understand Le modifications available that's people cleaner. our first for has to by while the That a [indiscernible] can really built itself been is a has of the it of for higher it's the Le of quality But ecosystem, but means primarily because path a a the massively and the that there much comes much also lot product, users. we talented have of alone, users sold selling trying X, be titles content Ultimate much within our Mans there there around store and titles. of platform the Ultimate. for rFactor the content premium a the through or right that out we're And Mans I It's way all of is but so that you've thing be vary new, original for really talked to long we're got in curate a that multiple and we're far of kind next that not And and meeting. date rate. of team. first from to and games experience to now that be long isn't

Operator

queue in additional back Hood this We remarks. have questions further turn time. no the for program any over to at the Mr. will I

Stephen Hood

offering much see about positive thank by feeling stepping you. call. It's QX. you this it for stone, like I'd Thank and this attending we very to do We close just my again a like everybody I'd appreciated your as time. to are to thanks

Operator

today's does This you participation. conclude program. your Thank for

You time, day. may have a disconnect wonderful and at any

Motorsport Games (MSGM) 7 May 242024 Q1 Earnings call transcript