Motorsport Games Inc.

Thank you for standing by and welcome to Motorsport Games Inc's first quarter 2026 earnings call. As a reminder, today's conference is being recorded. I would like to turn the conference over to Ben Rossiter-Turner from Motorsport Games. Please go ahead.

Thank you and welcome to Motorsport Games first quarter 2026 earnings conference call and webcast. On today's call is Motorsport Games Chief Executive Officer Stephen Hood and Chief Financial Officer Stanley Beckley. By now, everyone should have access to the company's first quarter 2026 earnings press release filed today after markets close. This is available on the investor relations section of MedSport Games website at www.medsportgames.com. During the course of this call, management may make forward-looking statements within the meaning of U.S. federal securities laws. These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results that differ materially from those described in these forward-looking statements. Except as required by law, the company undertakes no obligation to update any forward-looking statement made on this call or to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise. These refer to today's press release and the company's filings with the SEC, including its most recent quarterly report on Form 10Q, where the quarter ended March 31st, 2026, for a detailed discussion on certain risks that could cause actual results that differ materially from those expressed or implied in any forward-looking statements made today. In today's conference call, we will refer to certain non-GAAP financial measures, such as adjusted EBITDA, as we discussed the first quarter 2026 financial results. You will find a reconciliation of these non-GAAP measures to their most directly comparable GAAP measures, as well as other related disclosures in the press release issued earlier today, which is also available on the investor relations section of Motorsport Games website at www.motorsportgames.com. And now I'd like to turn over the call to Stephen Hood, Chief Executive Officer of Motorsport Games. Stephen.

Thank you, Ben. Good afternoon, everyone, and thank you for joining the Motorsport Games first quarter 2026 earnings call. We have started 2026 from a position of real financial strength. Revenues of $4 million in Q1 have more than doubled year on year. We have once again generated positive operating income, posted significantly improved adjusted EBITDA, and continue to grow our cash position from operations, The ongoing delivery of Lamont ultimate content or downloadable content or DLC plus the ever improving monetization of race control are key to those revenues. The financial independence, we have now built driven principally by the consistent commercial success of our primary gaming title Lamont ultimate. and the recurring revenue we are generating through rate control is what has given us the ability to act decisively in the early weeks of this quarter, both for the benefit of all our shareholders and to set the company up for its next stage of growth. I will come back to that shortly. First, on Le Mans Ultimate, player engagement continues to accelerate. On March 31st, we once again recorded a new all-time player peak. more than 8,800 concurrent players in Steam. This new peak was determined around the release of version 1.3, introducing Circuit de Barcelona Catalonia, the Duquesne LMP3 race car, and Logitech TrueForce support. This growth in player numbers is not a one-off. We have consistently reported player growth since launch. In the first quarter of 2025, we had a peak of 4,000 players, and an average of just over 1,300. Peak concurrent players grew 118% year-over-year. However, the metric we track most closely is average concurrent users because it strips out the spikes from content releases and shows whether people are actually sticking around. That number grew 169%. The floor is rising, not just the ceiling. Looking ahead to the second quarter, we have an update plan for release in June to coincide with the Real World 24 Hours of Le Mans, the highlight of the World Endurance Championship upon which our game is based. The persistent cadence of meaningful improvements that has defined our work over the past two years continues and continues to be funded by the company's own operating performance. I want to take a moment to speak about Race Control specifically, because I think it deserves to be understood, not just as a feature supporting Le Mans Ultimate, but as a standalone platform business in its own right. Race Control is our proprietary matchmaking, competition, and live service platform. It is the infrastructure layer that powers organized racing for our community, and increasingly for those partners who want to reach that community. Monthly recurring revenues have exceeded $0.2 million, and the first three months of 2026 have been among the strongest periods of growth we have seen since launch. But what excites us the most is not where race control is today. It is how quickly it can add meaningfully to our growth profile as we continue to lay in features and functionality. The roadmap ahead is substantial, and each addition compounds the platform's value to both our players and our commercial partners. What makes Race Control particularly attractive from a financial perspective is its margin profile. As a platform business built on infrastructure we already own and operate, incremental revenue carries significantly more favorable EBITDA contribution than our content business. It is, in the truest sense, a high-quality revenue stream. recurring, scalable, and deeply embedded in the daily behavior of our most engaged players. Beyond direct subscription revenue, race control is becoming the activation layer of choice for automotive manufacturers, motorsport series, and global consumer brands seeking direct engagement with a highly targeted, highly passionate audience. Our recent collaboration with Genesis, The luxury automotive brand and WEC newcomer demonstrates what that looks like in practice. And we are delighted that Logitech, one of the world's leading gaming hardware manufacturers, has chosen race control as a platform to power the Logitech G Challenge eSports series. These are not peripheral partnerships. They are a validation that race control has become an infrastructure that serious organizations want to access. The combination of LeMond Ultimate's ongoing commercial momentum, Race Control's growing recurring revenue layer, and our consistent operating profitability provides us with useful flexibility going forward. Progress on bringing LeMond Ultimate to PlayStation and Xbox in collaboration with our development partners continues as planned. We are deepening investment in our proprietary simulation technology, which is the long-term retention engine for the core of our market, We are strengthening the team with targeted hires across engineering, platform, and strategic leadership, and we are in the formative stages of preparing a new long-term project. This new title will leverage everything we have built, from our simulation technology, our live service infrastructure, our race control platform, and the community relationships we have cultivated through our popular racing game, Le Mans Ultimate. This is not a speculative greenfield project, but one that is being designed to take another giant stride in the company's output with the same accessible discipline that has defined our reemergence as a premier racing game developer. We believe this represents a significant long-term value creation opportunity, and we look forward to sharing more in due course. On console specifically, our exact timing for the release of Le Mans Ultimate remains subject to further development progress. The work undertaken is complex. Realistically, we expect to announce more details and launch as we enter 2027, as we move into the latter stages of the project and build confidence in our expected launch window. As previously mentioned, we are taking a careful quality first approach and plan to select the best release window rather than deliver out of financial necessity. Our existing and future player base is very vocal about their desire for a console release for Le Mans Ultimate, and we are pleased to confirm that development is progressing well. I would now like to turn to a series of corporate actions we executed in the past few weeks, which mark a significant step forward for the company. We repurchased 904,395 shares of our Class A common stock from Driven Lifestyle Group, LLC. As part of that transaction, all Class B shares, which had carried a 10 times voting advantage, were retired, meaning every share now holds equal voting power. Shareholders also approved an expansion of the awards available under our employee equity plan, giving us an important tool to incentivize and retain the people driving our growth. Before I hand over to Stanley, I want to step back and reflect on what this moment represents for Motorsport Games. The corporate actions we executed this quarter, the repurchase of shares from Driven Lifestyle, the retirement of Class B voting rights, the Citibank credit facility, are not simply transactional steps. They are a direct reflection of how far this company has come. And I want to take a moment to thank Driven Lifestyle. They were with us at inception and their early support was critical in getting Mugsport Games to where we are today. Their decision to retain their minority shareholding in the company is not only a vote of confidence in our future, it was also a pragmatic outcome from our balance sheet. By retaining an equity stake rather than a full cash exit, we were able to achieve the same strategic result, the retirement of all Class B super voting shares and the return of equal voting rights to all shareholders while deploying less cash to do so. These actions also point forward. Our strength in financial position built from operations has given us the ability to act decisively. We have returned greater ownership and strategic influence to the company, secured additional flexibility through the Citibank facility, and positioned ourselves for the next phase of growth. Everything we have built has been purposeful. The simulation technology, the live service infrastructure, race control, the community, the commercial partnerships, we have been building a foundation, one that we continue to advance, all whilst demonstrating its value supporting products like Le Mans Ultimate. We are not yet in a position to share the full detail of what that foundation will support next, but I want to be direct. We have a product roadmap we believe has the potential to drive very meaningful revenue and profit growth in 2027 and beyond, and we expect to discuss it in detail on our Q3 earnings call. What I can tell you today is that our next stage of growth will not require us to start from scratch. It will leverage everything we have already proven, our technology, our platform, our audience, and our operational discipline. The risk profile of what comes next is fundamentally different from a traditional game development bet because the foundation is already in existence and generating returns. We look forward to telling you much more. For now, I'll hand over to Stanley Beckley our Chief Financial Officer.