Motorsport Games Inc (MSGM) 2024 Q2 法說會逐字稿

Thank you for standing by, and welcome to Motorsport Games, Inc., second-quarter 2024 earnings call. (Operator Instructions) As a reminder, today's conference is being recorded.

感謝您的耐心等待，歡迎參加 Motorsport Games, Inc. 2024 年第二季財報電話會議。（操作員指示）提醒一下，今天的會議正在錄製中。

I would like to turn the conference over to Ben Rossiter-Turner from Motorsport Games. Please go ahead.

我想將會議交給 Motorsport Games 的 Ben Rossiter-Turner。請繼續。

Thank you, and welcome to Motorsport Games' second-quarter 2024 earnings conference call and webcast. On today's call is Motorsport Games' Chief Executive Officer, Stephen Hood; and Chief Financial Officer, Stanley Beckley.

謝謝，歡迎參加 Motorsport Games 的 2024 年第二季財報電話會議和網路廣播。出席今天電話會議的是 Motorsport Games 執行長 Stephen Hood；財務長史丹利·貝克利。

By now, everyone should have access to the company's second-quarter 2024 earnings press release filed today after market close. This is available on the Investor Relations section of Motorsport Games' website at www.motorsportgames.com. During the course of this call, management may make forward-looking statements within the meaning of US federal securities laws. These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements.

到目前為止，每個人都應該可以訪問該公司今天收盤後發布的 2024 年第二季度收益新聞稿。您可以在 Motorsport Games 網站 www.motorsportgames.com 的投資者關係部分取得此資訊。在本次電話會議期間，管理階層可能會做出美國聯邦證券法意義內的前瞻性陳述。這些陳述是基於管理階層目前的預期和信念，涉及可能導致實際結果與這些前瞻性陳述中描述的結果有重大差異的風險和不確定性。

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. Please refer to today's press release and the company's filings with the SEC, including its most recent quarterly report on Form 10-Q for the quarter ended June 30, 2024, for a detailed discussion on certain risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today.

除法律要求外，本公司不承擔更新本次電話會議中所做的任何前瞻性聲明或更新或更改其前瞻性聲明的義務，無論是由於新資訊、未來事件或其他原因。請參閱今天的新聞稿和公司向 SEC 提交的文件，包括截至 2024 年 6 月 30 日的季度的最新 10-Q 季度報告，詳細討論可能導致實際結果與實際結果存在重大差異的某些風險。發表的任何前瞻性陳述中明示或暗示的內容。

In today's conference call, we will refer to certain non-GAAP financial measures such as adjusted EBITDA as we discuss the second-quarter 2024 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.

在今天的電話會議中，我們在討論 2024 年第二季財務業績時將提及某些非 GAAP 財務指標，例如調整後 EBITDA。您可以在今天早些時候發布的新聞稿中找到這些非GAAP 衡量標準與其最直接可比較的GAAP 衡量標準以及其他相關披露的對賬，該新聞稿也可在Motorsport Games 網站www.motorsportgames 的投資者關係部分找到。

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

現在我想將電話轉給 Motorsport Games 執行長 Stephen Hood。史蒂芬？

Thank you, everyone, for joining this conference call today. Once again, it has been a productive and busy period at Motorsport Games in the quarter following the launch of our latest release, Le Mans Ultimate, in February this year. This gain very much remains our top focus, and we're pleased to have delivered on major update, 4 patches and 19 hot fixes since the launch phase in order to bring additional features and improvements to the title for our players.

感謝大家參加今天的電話會議。自今年 2 月推出最新版本《勒芒終極》以來，Motorsport Games 在本季再次迎來了富有成效且忙碌的時期。這項成果仍然是我們的首要關注點，我們很高興自發布階段以來已經提供了重大更新、4 個修補程式和 19 個熱修復，以便為我們的玩家帶來更多功能和改進。

Our passionate development team, Studio 397, have been working tirelessly to ensure that the momentum we gain did not go to waste and that the community supports the game through the early access process. We are delighted with the ongoing positive reception to our continued development of the title, and this positivity has shone through in a new revenue stream launched just recently. On July 23, we launched the first paid for downloadable content pack, or DLC, for the game.

我們熱情的開發團隊 Studio 397 一直在不知疲倦地工作，以確保我們獲得的動力不會浪費，並確保社群透過搶先體驗流程支援遊戲。我們很高興看到我們對這款遊戲的持續開發所持續的積極反應，這種積極性在最近推出的新收入來源中也得到了體現。7 月 23 日，我們推出了該遊戲的第一個付費下載內容包（DLC）。

And despite Le Mans Ultimate still operating within its early access phase, the uptick for this new content has been encouraging. It is now clear there is a very core passionate fan base growing around this project with players eager for more content and more features, in VR to collaborative co-op game modes and more, we are pushing ahead to deliver these enhancements as soon as possible. This has been underlined about our players' purchasing choice.

儘管《勒芒極限》仍處於早期訪問階段，但這項新內容的成長令人鼓舞。現在很明顯，圍繞這個專案有一個非常核心的熱情粉絲群正在成長，玩家渴望更多的內容和更多的功能，從 VR 到協作合作遊戲模式等等，我們正在努力盡快提供這些增強功能。我們的玩家的購買選擇強調了這一點。

Alongside the single DLC pack, we released a season pass. This season pass provides the ability to effectively prepurchase four packs, which included the one we released two weeks ago, with the remainder expected in the following three quarters for a discount worth around 25% of the final price. We are delighted to relay that almost half of all purchases were in favor of the larger, more expensive season pass. This, of course, helps to further fund development of the game they are clearly heavily invested in. We had anticipated the season pass to account for 5% to 10% of purchases, whereas in reality, as of today, it accounts for around 46% of purchasing.

除了單一 DLC 包外，我們還發布了季票。該季票提供了有效預購四包的能力，其中包括我們兩週前發布的包，其餘的預計在接下來的三個季度內以最終價格約 25% 的折扣購買。我們很高興地告訴大家，幾乎一半的購買都傾向於更大、更昂貴的季票。當然，這有助於進一步資助他們顯然投入巨資的遊戲的開發。我們預計季票將佔購買量的 5% 到 10%，而實際上，截至目前，季票佔購買量的 46% 左右。

In terms of the overall sales of the CLC content, I'm happy to report that already around 13% of Le Mans Ultimate users have purchased this content, once again, underlining the community sentiment surrounding the product. All of this has been achieved with no paid marketing budget. Thus far, we've predominantly relied on our own internal messaging efforts, supporting materials and social media platforms and good old-fashioned world of [now]. It shows a quality game with quality content has a place in today's market and suggest that we can attain much more with the product still in its infancy. (inaudible) maintain this has all of the necessary ingredients of a strong racing franchise.

就 CLC 內容的整體銷售而言，我很高興地報告，已有約 13% 的勒芒終極用戶購買了該內容，這再次凸顯了圍繞該產品的社群情緒。所有這一切都是在沒有支付行銷預算的情況下實現的。到目前為止，我們主要依靠我們自己的內部訊息工作、支援材料和社交媒體平台以及良好的老式世界[現在]。它表明具有優質內容的優質遊戲在當今市場上佔有一席之地，並表明我們可以利用仍處於起步階段的產品來實現更多目標。 （聽不清楚）認為這具有強大的賽車系列的所有必要要素。

With continued product refinements, we are convinced that the time will soon come to add the fuel to our sales efforts, reaching new fans and expanding our unit sales. To this end, we continue to explore how we might expand the platforms upon which Le Mans Ultimate is available and playable. During its early access period, the game has exceeded our internal objections and this success has resulted in us making the decision to accelerate our mission to make this game available on more formats, including Slim PlayStation and Microsoft Xbox games consoles.

隨著產品的不斷完善，我們相信很快就會為我們的銷售工作增添動力，吸引新粉絲並擴大我們的單位銷售。為此，我們繼續探索如何擴展勒芒終極版的可用和可玩平台。在早期訪問期間，該遊戲超出了我們內部的反對意見，這一成功使我們決定加快我們的使命，使該遊戲可以在更多格式上使用，包括 Slim PlayStation 和 Microsoft Xbox 遊戲機。

As part of our initiatives to increase revenue and support our development, you may previously have heard me speak about potential for a subscription service to come online, and we are now not far from bringing this online. With this, we will be looking to add new and innovative features to the title. This subscription service will not be mandatory for our players, but we are confident that the passionate fan base will be excited to jump into what we will have to offer here. This will be the third revenue stream after call game sales and DLC.

作為我們增加收入和支持我們發展的舉措的一部分，您可能已經聽過我談到線上訂閱服務的潛力，而我們現在離將其在線化不遠了。為此，我們將尋求為遊戲添加新的創新功能。這項訂閱服務對我們的玩家來說不是強制性的，但我們相信熱情的粉絲群會很興奮地參與我們在這裡提供的服務。這將是繼通話遊戲銷售和DLC之後的第三個收入來源。

Our plan was always to deliver on three fronts. And as promised, the first two are operational, with the third expected to arrive shortly. Away from Le Mans Ultimate efforts, we still have a close and productive relationship with Kindred Concepts around the F1 Arcade project, an experience that continues to provide revenue and opportunity, particularly as they continue to expand now at three venues in the US and UK We are being recognized as the technology suppliers for this experience and have been approached by other players in the space. Those interested in utilizing our technology that has been shown to be a market leader in providing solutions for event centers and hope to capitalize on this opportunity.

我們的計劃始終是在三個方面實現目標。正如承諾的那樣，前兩個已經投入運行，第三個預計很快就會到達。除了勒芒終極耐力賽之外，我們仍然與Kindred Concepts 圍繞F1 Arcade 項目保持著密切而富有成效的關係，這種經驗將繼續提供收入和機會，特別是他們現在在美國和英國的三個場館繼續擴張。那些對利用我們的技術感興趣的人，我們的技術已被證明是為活動中心提供解決方案的市場領導者，並希望利用這一機會。

Additionally, we have undertaken efforts to improve our balance sheet and short-term cash needs, which includes a settlement agreement we reached with IndyCar, LLC, resulting in a $2.9 million liability reduction. We also recently consummated a registered direct offering (inaudible) raising around $1 million in gross proceeds that we expect to use to fund our business and operations and development, whilst we continue to explore all available revenue and investment avenues to deliver upon the evident promise that this company and its products have.

此外，我們還努力改善資產負債表和短期現金需求，其中包括與 IndyCar, LLC 達成的和解協議，從而減少了 290 萬美元的負債。我們最近也完成了一項註冊直接發行（聽不清楚），籌集了約100 萬美元的總收益，我們希望將其用於為我們的業務、營運和發展提供資金，同時我們繼續探索所有可用的收入和投資途徑，以兌現明顯的承諾：這家公司及其產品都有。

With a streamlined business, this entanglement from historic challenges, successful spending controls and a reinvigorated development operation, producing arguably one of the market's most exciting racing titles for some years, we're delivering what I promised on my return last year. Nevertheless, our current product portfolio needs time and investment to flourish and as such, we are exploring strategic alternatives.

憑藉精簡的業務、歷史性挑戰的糾纏、成功的支出控制和重振的開發運營，我們可以說是多年來市場上最令人興奮的賽車遊戲之一，我們正在兌現我去年回歸時的承諾。然而，我們目前的產品組合需要時間和投資才能蓬勃發展，因此，我們正在探索策略替代方案。

Now I would like to invite Stanley Beckley, our Chief Financial Officer, to talk about the financial results for the second quarter of 2024.

現在我想邀請我們的財務長史丹利貝克利（Stanley Beckley）談談2024年第二季的財務表現。

Thank you, Stephen, and good evening, everyone. As with previous earnings calls, I won't be offering any forward-looking guidance today. Instead, I will focus on providing an update on our financial results and highlights from the second quarter of 2024. Revenues for the quarter were $1.9 million, up by $0.2 million or 8.2% when compared to the same period in the prior year. The increase in revenues was primarily due to higher digital game sales from the release of Le Mans Ultimate on PC in February 2024.

謝謝你，史蒂芬，大家晚上好。與之前的財報電話會議一樣，我今天不會提供任何前瞻性指導。相反，我將重點介紹 2024 年第二季我們的財務表現和亮點的最新情況。該季度營收為 190 萬美元，比去年同期增加 20 萬美元，即 8.2%。收入的成長主要是由於 2024 年 2 月 PC 版《勒芒終極》的發布帶來了數位遊戲銷售的成長。

Net income for the quarter was $2.1 million compared to a net loss of $8.2 million for the same period in the prior year, an improvement of $10.3 million. The increase in net income is driven by a $6.9 million reduction in operating expenses related to headcount reductions, lower general and administrative expenses, and no impairment of intangible assets recorded during the three months ended June 30, 2024, compared to the same period in the prior year. The increase in net income is also due to the commission of a $2.5 million gain stemming from settlement and license agreement with IndyCar, LLC executed on May 17, 2024 and a gain of $0.6 million related to the settlement agreement with BARC TOCA LIMITED, the exclusive promoter of the British touring car championship signed on April 12, 2024.

本季淨利潤為 210 萬美元，與去年同期淨虧損 820 萬美元相比，增加了 1,030 萬美元。淨利潤增加的原因是，與去年同期相比，截至 2024 年 6 月 30 日的三個月內，與裁員相關的營運費用減少了 690 萬美元、一般和管理費用減少以及沒有記錄無形資產減值前一年。淨利潤的增加也歸因於 2024 年 5 月 17 日與 IndyCar, LLC 簽署的和解和許可協議產生的 250 萬美元收益，以及與 BARC TOCA LIMITED 的和解協議相關的 60 萬美元收益。人於2024年4月12日簽約。

Furthermore, the company recorded a $0.3 million gain from the sale on April 26, 2024, to Traxion, GT Limited noncore assets. Net income attributable to Class A common stock was $0.87 per share for the second quarter of 2024 compared to a net loss of $3.04 for the same period in the prior year. We are reporting an adjusted EBITDA loss of $0.2 million for the second quarter of 2024 compared to an adjusted EBITDA loss of $2.7 million for the same period in the prior year. The improvement in adjusted EBITDA are the same as those costs in respect of a change in net income with a period and comparative quarter as well as a decrease in stock-based compensation compared to the prior year period.

此外，該公司在 2024 年 4 月 26 日出售給 Traxion, GT Limited 非核心資產中獲得了 30 萬美元的收益。2024 年第二季度，A 類普通股應佔淨利為每股 0.87 美元，而去年同期淨虧損為 3.04 美元。我們報告 2024 年第二季調整後 EBITDA 損失為 20 萬美元，而去年同期調整後 EBITDA 損失為 270 萬美元。調整後 EBITDA 的改善與同期和比較季度淨利潤變化以及股票薪酬與上年同期相比減少的成本相同。

As it relates to liquidity, this continues to be a key area of focus for the company. Net cash used in operations for the six months ended June 30, 2024, was approximately $1.4 million, representing an average monthly net cash burn from operations of $0.2 million, down $1.2 million when compared to the average monthly cash burn of $1.5 million for the 6 months ended June 30, 2023. As of June 30, 2024, the company had cash and cash equivalents of $0.5 million, which had increased to $1.3 million as of July 31, 2024. The increase in cash and cash equivalent was primarily due to $0.9 million in net proceeds received from a registered direct offering transaction that closed on July 29, 2024.

由於它與流動性有關，這仍然是公司關注的關鍵領域。截至2024 年6 月30 日的六個月營運中使用的現金淨額約為140 萬美元，意味著營運中每月平均淨現金消耗為20 萬美元，比2024 年6 月平均每月現金消耗額150 萬美元減少了120 萬美元。截至2024年6月30日，該公司擁有現金及現金等價物50萬美元，截至2024年7月31日已增加至130萬美元。現金和現金等價物的增加主要是由於從 2024 年 7 月 29 日結束的註冊直接發行交易中收到的 90 萬美元淨收益。

Based on our cash position and the average monthly cash burn, we do not believe there is sufficient cash on hand to fund company operations over the next year and that additional funding will be required in order to continue operations. In order to address this liquidity shortfall, we are actively exploring several options, including, but not limited to, additional funding in the form of potential equity and debt financing the game (inaudible) in the transactions. Strategic alternatives for our business, including but not limited to, the sale or licensing of our assets in addition to the recent sales of our NASCAR license and [charging] further cost reduction and structural initiatives. Thank you all for your time.

根據我們的現金狀況和平均每月現金消耗，我們認為手頭上沒有足夠的現金來為公司明年的營運提供資金，並且需要額外的資金才能繼續營運。為了解決這種流動性短缺問題，我們正在積極探索多種選擇，包括但不限於在交易中以潛在股權和債務融資的形式提供額外資金（聽不清楚）。我們業務的戰略替代方案，包括但不限於，除了最近出售我們的 NASCAR 許可證以及進一步降低成本和結構性舉措之外，出售或許可我們的資產。感謝大家抽出寶貴的時間。

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

現在我將把電話轉回給史蒂芬，讓他發表結束語。

Thank you, Stanley, and thank you to those joining us today. We continue to work hard on our US title, Le Mans Ultimate, including the services and content related to maximizing the opportunity here. We're very pleased with how this has been received by our players, so much so that we can now accelerate plans to bring into additional formats and reach a larger audience. Thank you for your time today.

謝謝你，史丹利，也謝謝今天加入我們的人們。我們繼續努力開發我們的美國賽事《勒芒極限》，包括與最大限度地利用這裡的機會相關的服務和內容。我們對玩家的反應感到非常滿意，因此我們現在可以加快計劃，推出更多格式並覆蓋更多受眾。感謝您今天抽出時間。

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

女士們、先生們，今天的電話會議到此結束。我們感謝您的參與，並請您斷開線路。