Motorsport Games(US:MSGM)2021-08-12 02:35Financial Data and Key Metrics Changes - Revenues for Q2 2021 were $2.2 million, a decrease of $1.7 million or 42% compared to $3.9 million in Q2 2020 [30] - Gross profit was $1.3 million or 60% of revenues, down from $2.6 million or 67% of revenues in the prior year, a decrease of $1.3 million or 49% [32] - Net loss attributable to Motorsport Games was $5.8 million or $0.50 per share for Q2 2021, compared to a net loss of $78,315 in Q2 2020 [36] - Operating expenses increased to $7.3 million from $2.5 million in the prior year, primarily due to acquisitions and headcount expansion [34] Business Line Data and Key Metrics Changes - Gaming segment revenues decreased by $1.6 million or 41% to $2.2 million, primarily due to lower sales of NASCAR console and PC games [30] - Esports revenues were zero in Q2 2021, down from $100,000 in Q2 2020, as the events held were primarily marketing efforts [31] Market Data and Key Metrics Changes - The company expects full-year revenues to be approximately $20.5 million, with adjusted EBITDA projected to be approximately negative $10 million [44] Company Strategy and Development Direction - The company aims to expand its portfolio by leveraging iconic brands and developing multiple franchises with dedicated esports offerings [10][13] - The upcoming release of NASCAR 21: Ignition on October 28 is seen as a pivotal moment, coinciding with the NASCAR season finale [11] - The company is also expanding to new platforms, including the Nintendo Switch, and has signed a long-term partnership with IndyCar [14][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of the pandemic on development timelines and emphasized the importance of adapting to changing conditions [47][48] - There is optimism regarding the upcoming game launch, with expectations of strong market demand and promotional support from NASCAR [50][62] Other Important Information - The company has a cash position of approximately $26 million [77] - The integration of acquired technologies, such as rFactor 2, is expected to enhance game development and esports offerings [17][23] Q&A Session Summary Question: Timing of the game launch and development delays - Management noted that the pandemic affected testing and development timelines, leading to the decision to delay the launch [47][48] Question: Guidance and revenue streams - Guidance was primarily based on console and PC releases, with some contributions expected from Studio 397 [52][53] Question: DLC and career mode features - Excitement was expressed about new features, including a robust paint booth for personalization, which were not possible in previous versions [55] Question: Physical sales estimates - The largest day one order in the company's history was confirmed, indicating strong demand [60] Question: Esports revenue outlook - Management expects significant revenue growth from upcoming esports events, including Le Mans and IndyCar [72] Question: Cash on hand - Current cash on hand is approximately $26 million [77] Question: Impact of COVID on sales - There was an uplift in sales during the pandemic, but a reduction is now being observed as the market stabilizes [78][80]