This article first appeared on GuruFocus .
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Revenue:First half 2026 revenue was $7.6 million, up 74% year-on-year.
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Gross Profit:First half 2026 gross profit grew 86.9% to $6.4 million.
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Gross Margin:Expanded to 84.7% in H1 2026 from 78.8% a year ago.
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GAAP Net Income:Positive for the sixth consecutive quarter; H1 2026 net income was $1.2 million, compared to $5.3 million in H1 2025 (which included non-recurring gains).
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Adjusted EBITDA:Q2 2026 was $0.8 million, compared to $1.4 million in Q2 2025; H1 2026 was $2.2 million, up 122.7% from $1.0 million in H1 2025.
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Adjusted Diluted EPS:$0.19 for Q2 2026, compared to $0.25 a year ago; $0.33 for H1 2026, compared to $0.24 in H1 2025.
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RaceControl Subscription Revenue:Approximately $1.4 million in H1 2026, up almost 349% year-on-year from $0.3 million in H1 2025.
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RaceControl Annual Recurring Revenue:Approximately $2.9 million on a run-rate basis, up from $1.2 million for the whole of 2025.
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RaceControl Paid Subscribers:Over 40,500 as of June 30, 2026, up more than 230% since June 2025.
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Cash and Cash Equivalents:$3.9 million as of June 30, 2026.
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Operating Cash Flow:Averaged approximately $0.5 million per month over the six months ended June 30, 2026.
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Le Mans Ultimate Sales:More than 0.5 million units of the base game and more than 1.2 million individual pieces of DLC sold since launch.
Release Date: August 14, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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First half 2026 revenue grew 74% year-over-year to $7.6 million, with gross margin expanding to 84.7% from 78.8%.
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RaceControl subscription revenue surged 349% year-over-year to $1.4 million in H1 2026, with annual recurring revenue run rate reaching $2.9 million.
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Paid subscribers for RaceControl grew over 230% year-over-year to 40,500, achieved organically with low acquisition costs.
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GAAP net income remained positive for the sixth consecutive quarter, with adjusted EBITDA more than doubling to $2.2 million in H1 2026.
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Le Mans Ultimate sold over 0.5 million base game units and 1.2 million DLC pieces, with strong player engagement and a successful U.S. Track Pack launch in July.
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The company completed a $3.7 million share repurchase, retiring all Class B shares and simplifying its capital structure.
Negative Points
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Adjusted EBITDA for Q2 2026 declined to $0.8 million from $1.4 million in Q2 2025, partly due to non-recurring vendor discounts in the prior year.
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Cash and cash equivalents stood at only $3.9 million as of June 30, 2026, with $1.2 million drawn on a $3 million credit facility.
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The company's growth is not linear, with quarterly performance subject to seasonality, the real-world motorsport calendar, and the timing of content releases.
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Console development for Le Mans Ultimate on PlayStation and Xbox remains complex and is not yet complete, with no confirmed release date.
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The company has not provided forward guidance, leaving uncertainty about future revenue and profitability trajectories.
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The new CFO, Peter Hansen-Chambers, highlighted the need for cultural and operational improvements to achieve the next phase of growth, indicating potential internal challenges.
Q & A Highlights
Q: With the release of the first USA Track Pack in July, can you discuss how that is trending and the road map for additional content releases through the remainder of the year and into 2027? A: Stephen Hood (CEO): The reaction from our community to the release has been very good, and it is performing better than we had hoped. We are currently working on additional content that will follow this year, with two more releases of packs planned for later in the year, though specific dates are yet to be confirmed.
Q: Turning to RaceControl, how is recurring revenue building? Can you give us a sense of the growth trajectory you anticipate and where retention is running? A: Stephen Hood (CEO): We currently have an annual recurring revenue run rate of $2.9 million. The attach rate to subscriptions is relatively consistent, allowing us to forecast accurately and feel confident in continued growth. While we don't provide formal guidance, we announced 349% year-on-year growth, making it a much more meaningful part of the business. We have specific initiatives in place to improve retention, which are working well, and we aim to keep the game exciting with new content to encourage continued subscriptions.
Q: Peter, congratulations on the new role. Can you talk about your key priorities in this role? A: Peter Hansen-Chambers (CFO): It's great to join the business, which has a great team, product, and focus, but we can do much more. My key priority is to help the company become a high-performing business, which is multifaceted. While we have performed well, we need to work on the culture and energy to take us to the next phase of the journey. This is just the first chapter of the story, and we need to ensure we have the foundation to move forward.
Q: Can you talk about subscriber acquisition costs and also the competitive environment? A: Stephen Hood (CEO): We have been in a great place, acquiring subscribers organically, which keeps costs very low and margins high. We are not focused on paid acquisition right now. We believe there is still scope to grow by converting RaceControl account holders into subscribers, as our conversion rate is already exceeding the traditional 5% target seen in successful mobile free-to-play games. We plan to experiment with communication and packaging of subscriptions before considering paid acquisition.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
