Motorsport Games (MSGM) Q2 Earnings & Revenues Top, Stock Down
Motorsport Games Inc. MSGM reported second-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. Moreover, the top line decreased while the bottom line expanded on a year-over-year basis.
The decline was due to a lower volume of digital and mobile games sales and unfavorable pricing scenario. Also, lower revenues earned through the development of third-party simulation platforms and esports sponsorships added to the downtrend. The company’s result was also affected by increased impairment losses and interest expenses, which were partially offset by reduced marketing, development and general & administrative expenses.
Following the results, shares of MSGM declined 3.02% in the after-hours trading session on Aug 21. Investors' sentiments might have been hurt since the company stated that it does not have sufficient liquidity to fund its operations for the remaining part of 2023. This statement is based on the available cash in hand and an average monthly net cash burn of approximately $1.5 million in the first six months of 2023.
Earnings and Revenues
In the quarter under review, adjusted loss per share of $1.54 was narrower than the Zacks Consensus Estimate of adjusted loss per share of $1.86. In the prior-year quarter, the company reported adjusted loss of $6.30 per share.
Total revenues of $1.7 million surpassed the consensus estimate of $1.5 million by 13.3%. However, the top line decreased 15% on a year-over-year basis.
Motorsport Games Inc. Price, Consensus and EPS Surprise
Motorsport Games Inc. price-consensus-eps-surprise-chart | Motorsport Games Inc. Quote
Adjusted EBITDA amounted to a loss of $2.7 million compared with the loss of $6 million reported in the prior-year quarter.
Operating Highlights
During second-quarter 2023, the company’s total operating costs and expenses were $9.5 million, up 21.8% year over year. General and administrative, as well as development expenses, declined 3% to $3.2 million and 33.3% to $1.8 million, respectively year over year. Also, sales and marketing expenses notably reduced 73.3% to $0.4 million from the prior-year quarter.
The quarter’s gross profit margin came at 50.2%, down 720 basis points from the prior-year quarter’s reported value of 57.4%.
Balance Sheet
As of Jun 30, Motorsport Games had cash on hand of $2 million compared with $1 million as of 2022 end. During the second quarter of 2023, the company’s accounts payable were $0.9 million compared with $2.4 million at 2022 end.
For the first six months of 2023, the company’s net cash used in operating activities was $8.9 million compared with $12 million reported in the prior-year quarter.
Zacks Rank
Motorsport Games currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Consumer Discretionary Releases
American Public Education, Inc. APEI reported better-than-expected second-quarter 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. However, both metrics declined on a year-over-year basis.
The company’s results benefited from the solid contributions of the American Public University System and Hondros College of Nursing segment as well as Graduate School USA revenues included in the Corporate and Other segment and cost-saving initiatives. However, the dismal performance of the Rasmussen University segment ailed the other segments’ tailwind to some extent.
Wynn Resorts, Limited WYNN reported impressive second-quarter 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Also, the top and bottom lines grew year over year.
The uptrend is backed by consistent performance growth in the company’s Macau and North America properties. Wynn Resorts witnessed growth in mass gaming, luxury retail and hotel businesses in Macau, portraying exceptional post-Covid recovery.
Adtalem Global Education Inc. ATGE reported better-than-expected results for fourth-quarter fiscal 2023. Earnings and revenues surpassed their respective Zacks Consensus Estimate. On a year-over-year basis, earnings declined despite revenue growth.
Nonetheless, these metrics gained and outpaced the previously provided guidance for fiscal 2023, given the improvement in enrollment, continued benefit from strategic initiatives and cost synergies.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
American Public Education, Inc. (APEI) : Free Stock Analysis Report
Wynn Resorts, Limited (WYNN) : Free Stock Analysis Report
Adtalem Global Education Inc. (ATGE) : Free Stock Analysis Report
Motorsport Games Inc. (MSGM) : Free Stock Analysis Report
