Motorsport Games Inc. reported its financial results for the three and nine months ended September 30, 2024, showing significant improvements in revenue and profitability compared to the same periods in 2023. For the third quarter of 2024, the company generated revenues of $1.8 million, a 6.4% increase from $1.7 million in Q3 2023. For the nine months ended September 30, 2024, total revenues reached $6.7 million, up 30.0% from $5.2 million in the prior year. The increase in revenue was primarily driven by higher digital game sales, particularly from the release of "Le Mans Ultimate."

Gross profit for the third quarter of 2024 was $1.1 million, reflecting a 26.0% increase from $862,392 in Q3 2023. The gross profit margin improved to 60.2% from 50.9% year-over-year. For the nine-month period, gross profit surged to $4.6 million, a 105.7% increase compared to $2.2 million in 2023, with a gross profit margin of 67.9%, up from 42.9%.

Despite these gains, the company reported a net loss of $573,025 for the third quarter of 2024, significantly reduced from a loss of $3.5 million in the same quarter of 2023. For the nine months, the net loss narrowed to $168,940 from $17.0 million in the prior year. The company also recorded a notable improvement in operating loss, which decreased from $16.7 million in the first nine months of 2023 to $1.1 million in 2024.

Motorsport Games has been actively restructuring to address liquidity constraints, including a workforce reduction of approximately 23 employees, impacting 38% of its workforce, and incurring a restructuring charge of about $200,000. The company is exploring strategic alternatives, including potential asset sales or licensing, to enhance its working capital position. Recent asset sales include the NASCAR license, which was sold for $5 million, and Traxion.

As of September 30, 2024, the company reported total assets of $7.0 million, down from $9.8 million at the end of 2023, while total liabilities decreased to $4.8 million from $7.7 million. Total stockholders’ equity attributable to Motorsport Games increased to $4.1 million from $2.6 million at the end of 2023.

The company continues to face challenges, including a substantial accumulated deficit of $86.3 million and ongoing liquidity issues, raising doubts about its ability to continue as a going concern. The management is focused on improving cash flow and reducing operating expenses while seeking additional funding to sustain operations.