GameStop Corp. (GME): Results of Operations and Financial Condition
GameStop Corp. (GME) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 GameStop Discloses Second Quarter 2026 Results GRAPEVINE, Texas, September 8, 2026 (BUSINESS WIRE) — GameStop Corp. (NYSE: GME) (“GameStop” or the “Company”) today released financial results for the second quarter ended August 1, 2026. The Company’s condensed and con
How this was made
The 30-second read
Why it matters
The earnings beat and higher EBITDA outlook suggest a turnaround, potentially prompting re‑rating by analysts.
Market read
First‑hand earnings data with upgraded guidance provides actionable insight for traders.
What to watch
Recent store closures and France divestiture may weigh on future growth despite short‑term beat.
GameStop reported its highest second quarter operating income in Company history, with operating income of $160.2 million, while net sales declined to $790.2 million and fiscal year 2026 Adjusted EBITDA outlook increased to in excess of $650 million.
Operating income increased to $160.2 million from $66.4 million, adjusted EBITDA rose to $174.0 million from $75.7 million, and the Company raised its fiscal year 2026 Adjusted EBITDA outlook. These improvements occurred despite net sales declining to $790.2 million from $972.2 million, with collectibles growing 57% year over year to represent 45.1% of sales.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $790.2 million | – | – |
| Cost of salesGAAP | $445.2 million | – | – |
| Gross profitGAAP | $345.0 million | – | – |
| Gross profit as a percentage of net salesGAAP | 43.7 % | – | – |
| Selling, general and administrative expensesGAAP | $187.1 million | – | – |
| Selling, general and administrative expenses as a percentage of net salesGAAP | 23.7 % | – | – |
| Adjusted SG&A expensenon-GAAP | $186.3 million | – | – |
| Asset impairmentsGAAP | $(2.3) million | – | – |
| Operating incomeGAAP | $160.2 million | – | – |
| Operating income as a percentage of net salesGAAP | 20.3 % | – | – |
| Adjusted operating incomenon-GAAP | $158.7 million | – | – |
| Interest income, netGAAP | $(77.1) million | – | – |
| Gain on derivative asset, netGAAP | $(166.3) million | – | – |
| Loss (gain) on digital assets and related receivablesGAAP | $75.0 million | – | – |
| Unrealized gain on equity investmentGAAP | $(72.1) million | – | – |
| Other income, netGAAP | $(19.5) million | – | – |
| Income before income taxesGAAP | $420.2 million | – | – |
| Income tax expenseGAAP | $121.5 million | – | – |
| Net incomeGAAP | $298.7 million | – | – |
| Net income as a percentage of net salesGAAP | 37.8 % | – | – |
| Basic income per shareGAAP | $0.67 | – | – |
| Diluted income per shareGAAP | $0.51 | – | – |
| Adjusted net incomenon-GAAP | $161.1 million | – | – |
| Adjusted basic net income per sharenon-GAAP | $0.36 | – | – |
| Adjusted diluted net income per sharenon-GAAP | $0.27 | – | – |
| Adjusted EBITDAnon-GAAP | $174.0 million | – | – |
| Net cash flows provided by operating activitiesGAAP | $62.4 million | – | – |
| Capital expendituresGAAP | $(1.7) million | – | – |
| Free cash flownon-GAAP | $60.7 million | – | – |
| Six-month net salesGAAP | $1,625.5 million | – | – |
| Six-month operating incomeGAAP | $303.5 million | – | – |
| Six-month net incomeGAAP | $688.3 million | – | – |
| Six-month Adjusted EBITDAnon-GAAP | $339.7 million | – | – |
| Six-month net cash flows provided by operating activitiesGAAP | $399.8 million | – | – |
| Six-month free cash flownon-GAAP | $393.6 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| CollectiblesCollectibles represented 45.1% of net sales, compared to 23.4% of net sales in the prior year's second quarter. | $356.3 million | – | 57% |
| Video GamesVideo Games represented 33.3% of total net sales. | $263.2 million | – | – |
| Pre-Owned and RefurbishedPre-Owned and Refurbished represented 21.6% of total net sales. | $170.7 million | – | – |
| United States geographic segmentOperating income was $153.2 million. | $608.2 million | – | – |
| Australia geographic segmentOperating income was $8.1 million. | $120.9 million | – | – |
| Europe geographic segmentOperating loss was $(1.1) million. | $61.1 million | – | – |
fiscal year ending January 30, 2027 outlook
- NoteAdjusted EBITDA in excess of $650 million
What drove it
- Net sales decreased primarily because of the prior-year launch of Nintendo Switch 2, planned store closures, and the divestiture of the Company's France operations.
- Collectibles net sales grew 57% year over year to $356.3 million and represented 45.1% of net sales.
- Gross profit was $345.0 million and gross profit as a percentage of net sales was 43.7 %.
- SG&A expense declined to $187.1 million from $218.8 million.
- The Company began reporting net sales in three categories, Collectibles, Video Games, and Pre-Owned and Refurbished, beginning with this quarter. Prior-period amounts were recast to conform to the new presentation.
- Reported net income included gain on derivative asset, net of $(166.3) million and unrealized gain on equity investment of $(72.1) million, while loss on digital assets and related receivables was $75.0 million.
Concerns
- Net sales were $790.2 million, compared to $972.2 million in the prior year's second quarter.
- Video Games net sales were $263.2 million, compared to $494.6 million in the prior year's second quarter.
- Pre-Owned and Refurbished net sales were $170.7 million, compared to $250.0 million in the prior year's second quarter.
- Net cash flows provided by operating activities were $62.4 million, compared to $117.4 million in the prior year's second quarter.
- Free cash flow was $60.7 million, compared to $113.3 million in the prior year's second quarter.
- The Company cited dependence on holiday selling season, the popularity and sale of trading cards, cyclicality of the video game industry, planned store closures, and the proposed acquisition of eBay among its forward-looking risks.
What to watch
- Delivery of Adjusted EBITDA in excess of $650 million for the fiscal year ending January 30, 2027.
- The mix and level of Collectibles sales, which were $356.3 million and 45.1% of net sales in the second quarter.
- Video Games sales following $263.2 million in second-quarter net sales compared with $494.6 million in the prior-year second quarter.
- Operating cash flow and free cash flow after second-quarter net cash flows provided by operating activities of $62.4 million and free cash flow of $60.7 million.
- The Company's proposed acquisition of eBay and the value of its equity investment, which was $4,946.9 million as of August 1, 2026.
- The effect of the September 3, 2026 convertible notes exchanges, which retired approximately $1.4 billion aggregate principal amount and reduced total long-term debt to approximately $2.8 billion.
Balance sheet and cash flow
- Cash and cash equivalents were $4,854.3 million as of August 1, 2026, compared to $8,694.4 million as of August 2, 2025.
- Marketable securities were $206.0 million as of August 1, 2026.
- Digital assets and related receivables were $294.1 million as of August 1, 2026.
- Total cash, cash equivalents, marketable securities, digital assets and related receivables were $5.4 billion at the close of the second quarter.
- The Company held approximately 43.4 million shares of eBay common stock with a fair value of approximately $4.9 billion as of August 1, 2026.
- Equity investment was $4,946.9 million as of August 1, 2026.
- Merchandise inventories, net were $439.0 million as of August 1, 2026, compared to $484.9 million as of August 2, 2025.
- Total assets were $11,144.8 million as of August 1, 2026.
- Long-term debt was $4,167.8 million as of August 1, 2026.
- On September 3, 2026, the Company completed privately negotiated exchanges retiring approximately $1.4 billion aggregate principal amount of its 0.00% Convertible Senior Notes due 2030 and 0.00% Convertible Senior Notes due 2032, reducing total long-term debt to approximately $2.8 billion.
- Total stockholders’ equity was $6,141.4 million as of August 1, 2026.
- Net cash flows used in investing activities were $(2,608.0) million for the 13 weeks ended August 1, 2026, including $4,386.3 million of cash paid for equity investment.
- Cash, cash equivalents and restricted cash at end of period were $4,868.3 million.
Analysis
GameStop reported substantially higher profitability despite lower sales. Second-quarter net sales were $790.2 million compared with $972.2 million in the prior-year quarter, with the Company attributing the decline primarily to the prior-year Nintendo Switch 2 launch, planned store closures, and the divestiture of France operations. The operating result nonetheless improved to $160.2 million from $66.4 million, which the Company identified as its highest second-quarter operating income in history.
Sales mix changed sharply toward collectibles. Collectibles sales increased 57% year over year to $356.3 million and represented 45.1% of total sales, versus $227.6 million and 23.4% in the prior-year quarter. Video Games sales were $263.2 million versus $494.6 million, while Pre-Owned and Refurbished sales were $170.7 million versus $250.0 million. Gross profit increased to $345.0 million from $283.1 million, and gross profit as a percentage of net sales was 43.7 % compared with 29.1 %.
Cost control also supported operating performance. SG&A expenses declined to $187.1 million from $218.8 million, although SG&A as a percentage of net sales was 23.7 % compared with 22.5 %. Adjusted operating income was $158.7 million compared with $64.7 million, and adjusted EBITDA increased to $174.0 million from $75.7 million. For the first six months, adjusted EBITDA was $339.7 million compared with $114.3 million.
GAAP net income was $298.7 million compared with $168.6 million, but it included a gain on derivative asset, net of $(166.3) million and an unrealized gain on equity investment of $(72.1) million, partly offset by a $75.0 million loss on digital assets and related receivables. Adjusted net income was $161.1 million compared with $138.3 million. Cash generation was positive but below the prior-year quarter, with operating cash flow of $62.4 million and free cash flow of $60.7 million, compared with $117.4 million and $113.3 million, respectively.
The Company increased its fiscal year 2026 Adjusted EBITDA outlook to in excess of $650 million from its prior outlook of in excess of $600 million provided on June 26, 2026. At August 1, 2026, cash, cash equivalents, marketable securities, digital assets and related receivables totaled $5.4 billion, and the Company held an equity investment of $4,946.9 million. After quarter end, it completed exchanges that retired approximately $1.4 billion aggregate principal amount of convertible notes and reduced total long-term debt to approximately $2.8 billion.
Not in the filing
stated, not guessed- Prior-quarter comparisons for reported operating metrics were not provided.
- Explicit year-over-year percentage changes were not provided for total net sales, Video Games net sales, Pre-Owned and Refurbished net sales, gross profit, SG&A expense, operating income, net income, EPS, operating cash flow, free cash flow, or Adjusted EBITDA.
- Revenue, gross margin, operating expense, and tax-rate guidance were not provided.
- Dividend and share-repurchase activity for the reported quarter were not provided.
- Management quotes from named executives were not provided.
- A previous outlook document was not provided for formal actual-versus-prior-guidance comparison.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
GameStop filed an SEC Form 8‑K reporting its Q2 2026 financials and updated FY guidance.
Ticker impact
GameStop disclosed Q2 2026 results with operating income $160.2M, net sales $790.2M and raised FY2026 Adjusted EBITDA outlook to >$650M.
Potential short-term upside of 5-10% as market digests higher earnings and guidance.
Operating income more than doubled YoY and guidance increase signals improved profitability, likely attracting buyers.
Market effects
Positive earnings may lift the broader video‑game retail sector and collectibles niche.
U.S. retail investors may increase exposure to turnaround stories.
Limited to U.S. markets; no immediate global macro effect.
Counterpoint
The rise in digital assets and eBay investment could mask underlying cash burn; caution on sustainability.
Key entities
- companyGameStop Corp.
U.S. video‑game retailer reporting Q2 2026 results.
- companyeBay Inc.
Holder of a $4.9B equity investment by GameStop.
