GameStop Q2 profit jumps on margins, eBay gains
GameStop’s quarter shows lower revenue but higher margins and large investment gains, plus a new eBay stake and major convertible note exchange.
Rhea-AI Filing Summary
GameStop Corp. (GME) reported sharply higher profitability for the quarter ended August 1, 2026, driven by mix shift and large investment gains, despite lower sales. Net sales fell to $790.2 million, down 18.7% year over year, but gross margin improved to 43.7% as Collectibles became 45.1% of sales while lower‑margin Video Games dropped to 33.3%.
Operating income rose to $160.2 million from $66.4 million on higher margins and a 14.5% reduction in SG&A. Net income increased to $298.7 million (basic EPS $0.67, diluted $0.51) from $168.6 million, aided by a $166.3 million gain on a derivative tied to eBay shares and a $72.1 million unrealized gain on the resulting $4.9 billion eBay equity stake, partly offset by a $75.0 million Bitcoin‑related loss.
GameStop ended the quarter with $5.06 billion in cash, cash equivalents and marketable securities plus $294.1 million in digital assets and related receivables, against $4.17 billion of convertible debt. The company exited France, secured a new $2.0 billion share repurchase authorization, and later agreed to exchange $1.4 billion of convertible notes for about 55.5 million shares and $358.4 million in cash, expecting a non‑cash accounting charge.
Positive
- Net income surged to $298.7 million for the quarter and $688.3 million year to date, up 77.2% and 222.5% respectively versus 2025, supported by higher margins and sizeable investment gains.
- Gross margin expanded to 43.7% from 29.1% for the quarter as Collectibles grew to 45.1% of sales and Video Games mix declined, indicating a more profitable product mix.
- SG&A declined by $31.7 million (14.5%) in the quarter and $58.2 million (13.0%) year to date through cost discipline, store closures, and international exits, lifting operating income to $160.2 million from $66.4 million.
- The balance sheet holds $5.06 billion in cash, cash equivalents and marketable securities plus $294.1 million in digital assets and related receivables, providing substantial liquidity relative to operations.
- GameStop built a $4.95 billion equity position in eBay, with cumulative appreciation of $560.6 million, and may benefit from further mark‑to‑market gains if the investment performs well.
Negative
- Revenue contracted, with net sales down 18.7% in the quarter and 4.6% year to date, including a 46.8% decline in Video Games and a 31.7% drop in Pre‑Owned and Refurbished for the quarter.
- Earnings quality is heavily influenced by non‑operating items, including a $434.7 million gain on derivative assets, a $72.1 million unrealized gain on the eBay stake, and a $73.9 million loss on digital assets year to date.
- GameStop carries $4.17 billion of 0.00% Convertible Senior Notes; subsequent exchanges for equity and cash will create dilution and the company expects a non‑cash charge related to the transaction.
- Exposure to Bitcoin and related derivatives produced a $75.0 million quarterly loss and $73.9 million loss year to date on digital assets and receivables, adding volatility to results.
- The effective tax rate jumped to 28.9% for the quarter and 25.7% year to date from low prior‑year levels after net operating loss benefits were largely exhausted, increasing the tax drag on future earnings.
Filing Explained
The GameStop convertible-note exchange was completed on
Key Figures
Quarterly Net Sales: $790.2 million
Quarterly Net Income: $298.7 million
Quarterly Diluted EPS: $0.51
+5 more
8 metrics
Quarterly Net Sales
$790.2 million
Three months ended August 1, 2026, down 18.7% from $972.2 million a year earlier
Quarterly Net Income
$298.7 million
Three months ended August 1, 2026, up 77.2% from $168.6 million a year earlier
Quarterly Diluted EPS
$0.51
Three months ended August 1, 2026, versus $0.31 in the prior-year quarter
Gross Margin
43.7%
Quarter ended August 1, 2026, compared with 29.1% in the prior-year period
Cash, Cash Equivalents and Marketable Securities
$5.06 billion
As of August 1, 2026; includes $4.85 billion cash and equivalents and $206.0 million marketable securities
Convertible Debt Outstanding
$4.17 billion
Total 2030 and 2032 Convertible Senior Notes as of August 1, 2026
eBay Equity Investment Fair Value
$4.95 billion
Fair value of 43.39 million eBay shares held as of August 1, 2026
Digital Assets and Related Receivables
$294.1 million
Digital assets and receivables balance as of August 1, 2026; produced a $73.9 million loss year to date
Key Terms
Convertible Senior Notes, Put/Call Pairs, Derivative asset, Digital assets receivable, +2 more
6 terms
Convertible Senior Notes financial
"we completed a private offering of $1,500.0 million aggregate principal amount of our 0.00% Convertible Senior Notes due 2030"
Convertible senior notes are a type of loan that a company issues to investors, which can be turned into company shares later on. They are called "senior" because they are paid back before other debts if the company runs into trouble. This allows investors to earn interest like a loan but also have the chance to own part of the company if its value rises.
Put/Call Pairs financial
"entered into a series of paired put and call option transactions (the "Put/Call Pairs") that provided economic exposure"
Derivative asset financial
"the Company presented the gross fair value of the Put/Call Pairs as a Derivative asset and any related cash collateral"
A derivative asset is a financial contract whose value comes from the price or performance of something else, like a stock, bond, commodity, or index. Think of it as a ticket whose worth depends on who shows up: investors use derivatives to protect against losses, lock in prices, or take amplified bets without owning the underlying item, which can lower costs but also amplify risk and complexity.
Digital assets receivable financial
"the Company derecognized the Pledged Bitcoin and recognized a Digital assets receivable representing the fair value"
Amounts a company is owed that are payable in cryptocurrencies or other tokenized forms of money rather than traditional cash—think of them as IOUs denominated in digital money. Investors should care because the value and ease of converting those receivables can swing rapidly with crypto prices, and they carry extra risks around custody, settlement and accounting that can affect reported revenue, cash flow and the company’s true financial health.
covered-call option contracts financial
"outstanding covered-call option contracts referencing approximately 2,000 Bitcoin, with a strike price of $70,000"
One Big Beautiful Bill Act regulatory
"On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the United States"
A "one big beautiful bill act" is a single, large piece of legislation that bundles many policy changes and measures into one package instead of passing them separately. For investors, it matters because such omnibus bills can swiftly change tax rules, spending levels, industry regulations or subsidies all at once—like a single shopping cart that suddenly adds many items to a household budget—creating broad, rapid shifts in company costs, revenues and market expectations.
Earnings Snapshot
Quarterly Net Sales: $790.2 million
Three and six months ended August 1, 2026
Quarterly Net Sales
$790.2 million
Down 18.7% from $972.2 million in the prior-year quarter
Quarterly Net Income
$298.7 million
Up 77.2% from $168.6 million in the prior-year quarter
Year-to-date Net Sales
$1,625.5 million
Down 4.6% from $1,704.6 million in the prior-year period
Year-to-date Net Income
$688.3 million
Up 222.5% from $213.4 million in the prior-year period
Quarterly Diluted EPS
$0.51
Increased from $0.31 a year earlier
Gross Margin (quarter)
43.7%
Up from 29.1% in the prior-year quarter
FAQ
How did GME’s revenue and profit change in the quarter ended August 1, 2026?
Net sales were $790.2 million, down 18.7% year over year, but net income rose to $298.7 million from $168.6 million. The increase came from higher gross margins, lower SG&A, and large non‑operating gains on eBay‑related derivatives and equity.
What drove GameStop’s margin improvement in fiscal Q2 2026?
Gross margin increased to 43.7% from 29.1%, mainly because Collectibles grew to 45.1% of net sales while lower‑margin Video Games fell to 33.3%. Collectibles are higher‑margin products, and the mix shift away from hardware‑heavy video game launches improved overall profitability.
How large is GameStop’s investment in eBay as of August 1, 2026?
GameStop owned 43,390,383 shares of eBay Common Stock, about 9.8% of eBay’s outstanding shares, with a fair value of approximately $4.95 billion. The aggregate cash cost basis was $4.39 billion, implying cumulative appreciation of $560.6 million.
What is GameStop’s cash and debt position at GME as of August 1, 2026?
The company reported $4.85 billion in cash and cash equivalents and $206.0 million in marketable securities, totaling $5.06 billion, plus $294.1 million in digital assets and related receivables. Outstanding debt consisted of $4.17 billion in Convertible Senior Notes.
What are the details of GameStop’s convertible note exchange after quarter‑end?
On September 3, 2026, GameStop closed exchanges for approximately $400 million of 2030 Notes and $1.0 billion of 2032 Notes. Existing noteholders received about 55.5 million GME shares and $358.4 million in cash in total, and the company expects a non‑cash accounting charge.
How is GameStop’s product mix shifting, particularly Collectibles vs. Video Games?
In the quarter, Collectibles net sales were $356.3 million, 45.1% of total net sales, up from 23.4% a year earlier. Video Games dropped to $263.2 million, or 33.3% of net sales, from 50.9%, reflecting weaker console‑hardware activity and strong trading card growth.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
FOR THE QUARTERLY PERIOD ENDED AUGUST 1, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
COMMISSION FILE NO. 1-32637
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
Registrant’s telephone number, including area code:
Securities Registered Pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act:
| ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company | |||||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Number of shares of $.001 par value Class A Common Stock outstanding as of September 3, 2026: 504,500,990 .
TABLE OF CONTENTS
Part I — FINANCIAL INFORMATION | |||||||||||
| Page No. | |||||||||||
| Item 1. | Financial Statements (unaudited) | 1 | |||||||||
Condensed Consolidated Balance Sheets — As of August 1, 2026, August 2, 2025 and January 31, 2026 | 1 | ||||||||||
Condensed Consolidated Statements of Operations — For the three and six months ended August 1, 2026 and August 2, 2025 | 2 | ||||||||||
Condensed Consolidated Statements of Comprehensive Income — For the three and six months ended August 1, 2026 and August 2, 2025 | 3 | ||||||||||
Condensed Consolidated Statements of Cash Flows — For the six months ended August 1, 2026 and August 2, 2025 | 4 | ||||||||||
Condensed Consolidated Statements of Stockholders’ Equity — For the three and six months ended August 1, 2026 and August 2, 2025 | 5 | ||||||||||
Notes to Condensed Consolidated Financial Statements | 6 | ||||||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 24 | |||||||||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 35 | |||||||||
| Item 4. | Controls and Procedures | 35 | |||||||||
PART II — OTHER INFORMATION | |||||||||||
| Item 1. | Legal Proceedings | 36 | |||||||||
| Item 1A. | Risk Factors | 36 | |||||||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 36 | |||||||||
| Item 3. | Defaults Upon Senior Securities | 36 | |||||||||
| Item 4. | Mine Safety Disclosures | 36 | |||||||||
| Item 5. | Other Information | 36 | |||||||||
| Item 6. | Exhibits | 37 | |||||||||
SIGNATURES | 38 | ||||||||||
Table of Contents
PART I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GAMESTOP CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except par value per share)
(unaudited)
| August 1, 2026 | August 2, 2025 | January 31, 2026 | ||||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Current assets: | ||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | |||||||||||||||||
| Marketable securities | ||||||||||||||||||||
Receivables, net of allowance of $ | ||||||||||||||||||||
| Digital assets and related receivables | ||||||||||||||||||||
| Merchandise inventories, net | ||||||||||||||||||||
| Prepaid expenses and other current assets | ||||||||||||||||||||
Assets held for sale | ||||||||||||||||||||
| Total current assets | ||||||||||||||||||||
Property and equipment, net of accumulated depreciation of $ | ||||||||||||||||||||
| Digital assets | ||||||||||||||||||||
| Equity investment | ||||||||||||||||||||
| Operating lease right-of-use assets | ||||||||||||||||||||
| Deferred income taxes | ||||||||||||||||||||
| Other noncurrent assets | ||||||||||||||||||||
| Total assets | $ | $ | $ | |||||||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
| Current liabilities: | ||||||||||||||||||||
| Accounts payable | $ | $ | $ | |||||||||||||||||
| Accrued liabilities and other current liabilities | ||||||||||||||||||||
| Current portion of operating lease liabilities | ||||||||||||||||||||
| Liabilities held for sale | ||||||||||||||||||||
| Total current liabilities | ||||||||||||||||||||
| Long-term debt | ||||||||||||||||||||
| Operating lease liabilities | ||||||||||||||||||||
| Other long-term liabilities | ||||||||||||||||||||
| Total liabilities | ||||||||||||||||||||
| Stockholders’ equity: | ||||||||||||||||||||
Class A common stock — $ | ||||||||||||||||||||
| Additional paid-in capital | ||||||||||||||||||||
| Accumulated other comprehensive loss | ( | ( | ( | |||||||||||||||||
| Retained earnings (loss) | ||||||||||||||||||||
| Total stockholders’ equity | ||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | $ | $ | |||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
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GAMESTOP CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| August 1, 2026 | August 2, 2025 | August 1, 2026 | August 2, 2025 | |||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Cost of sales | ||||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||||||||||||
Asset impairments | ( | ( | ( | |||||||||||||||||||||||
| Operating income | ||||||||||||||||||||||||||
| Interest income, net | ( | ( | ( | ( | ||||||||||||||||||||||
| Gain on derivative asset, net | ( | ( | ||||||||||||||||||||||||
| Loss (gain) on digital assets and related receivables | ( | ( | ||||||||||||||||||||||||
| Unrealized gain on equity investment | ( | ( | ||||||||||||||||||||||||
Other income, net | ( | ( | ( | |||||||||||||||||||||||
Income before income taxes | ||||||||||||||||||||||||||
Income tax expense | ||||||||||||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||||||||||||
| Net income per share: | ||||||||||||||||||||||||||
| Basic | $ | $ | $ | $ | ||||||||||||||||||||||
| Diluted | $ | $ | $ | $ | ||||||||||||||||||||||
| Weighted-average shares outstanding: | ||||||||||||||||||||||||||
| Basic | ||||||||||||||||||||||||||
| Diluted | ||||||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
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GAMESTOP CORP.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
(unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| August 1, 2026 | August 2, 2025 | August 1, 2026 | August 2, 2025 | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Other comprehensive income: | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | ( | ( | ||||||||||||||||||||||||
| Unrealized gain (loss) on available-for-sale securities | ( | |||||||||||||||||||||||||
| Total comprehensive income | $ | $ | $ | $ | ||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
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GAMESTOP CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
| Six Months Ended | ||||||||||||||
| August 1, 2026 | August 2, 2025 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||
Net income | $ | $ | ||||||||||||
| Adjustments to reconcile net income to net cash flows provided by operating activities: | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Stock-based compensation expense, net | ||||||||||||||
| Loss (gain) on digital assets and related receivables | ( | |||||||||||||
| Gain on derivative asset | ( | |||||||||||||
| Unrealized gain on equity investment | ( | |||||||||||||
| Loss (gain) on disposal of property and equipment, net | ( | |||||||||||||
| Asset impairments | ( | |||||||||||||
| Deferred income taxes | ||||||||||||||
| Other, net | ( | |||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| Receivables, net | ( | |||||||||||||
| Merchandise inventories, net | ( | ( | ||||||||||||
| Prepaid expenses and other assets | ||||||||||||||
| Prepaid income taxes and income taxes payable | ( | ( | ||||||||||||
| Accounts payable and accrued liabilities | ||||||||||||||
| Operating lease right-of-use assets and lease liabilities | ( | ( | ||||||||||||
| Changes in other long-term liabilities | ( | |||||||||||||
| Net cash flows provided by operating activities | ||||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Capital expenditures | ( | ( | ||||||||||||
| Purchases of marketable securities | ( | ( | ||||||||||||
| Proceeds from maturities and sales of marketable securities | ||||||||||||||
| Cash paid for equity investment | ( | |||||||||||||
| Collateral pledged for derivative asset | ( | |||||||||||||
| Proceeds from collateral pledged for derivative asset | ||||||||||||||
| Proceeds from written options on digital assets | ||||||||||||||
| Purchase of digital assets | ( | |||||||||||||
| Proceeds from other divestitures, net of cash disposed | ( | |||||||||||||
| Other | ( | |||||||||||||
| Net cash flows used in investing activities | ( | ( | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Proceeds from the issuance of convertible debt | ||||||||||||||
| Debt issuance costs from convertible debt | ( | |||||||||||||
| Repayments of debt | ( | |||||||||||||
| Proceeds from the exercise of warrants | ||||||||||||||
| Proceeds from equity awards directly withheld from employees for tax purposes | ||||||||||||||
| Payments to tax authorities for equity awards directly withheld from employees | ( | ( | ||||||||||||
| Net cash flows provided by financing activities | ||||||||||||||
| Exchange rate effect on cash, cash equivalents and restricted cash | ||||||||||||||
| Less: Net change in cash balances classified as assets held for sale | ( | |||||||||||||
| (Decrease) Increase in cash, cash equivalents and restricted cash | ( | |||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | ||||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | $ | ||||||||||||
See accompanying notes to condensed consolidated financial statements.
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GAMESTOP CORP.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in millions, except for per share data)
(unaudited)
| Class A Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total Stockholders' Equity | |||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||
| Balance at January 31, 2026 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | |||||||||||||||||||||||||||||||
| Stock-based compensation expense, net | — | — | — | — | |||||||||||||||||||||||||||||||
| Issuance of Class A Common stock, net of cost | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Unrealized loss on available-for-sale securities | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Balance at May 2, 2026 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Stock-based compensation expense, net | — | — | — | — | |||||||||||||||||||||||||||||||
| Issuance of Class A Common stock, net of cost | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Unrealized gain on available-for-sale securities | — | — | — | — | |||||||||||||||||||||||||||||||
| Balance at August 1, 2026 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Class A Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained (Loss) Earnings | Total Stockholders' Equity | |||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||
| Balance at February 1, 2025 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | |||||||||||||||||||||||||||||||
| Stock-based compensation expense, net | — | — | — | — | |||||||||||||||||||||||||||||||
Settlement of stock-based awards | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Balance at May 3, 2025 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | |||||||||||||||||||||||||||||||
| Stock-based compensation expense, net | — | — | — | — | |||||||||||||||||||||||||||||||
| Settlement of stock-based awards | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Balance at August 2, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
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GAMESTOP CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except per share amounts)
(unaudited)
1. General Information
The Company
GameStop Corp. ("GameStop," "we," "us," "our," or the "Company"), a Delaware corporation established in 1996, offers games, collectibles, and entertainment products through its stores and ecommerce platforms.
Effective July 8, 2026, we operate our business in two geographic segments: United States and Australia. During the second quarter of the fiscal year ending January 30, 2027 ("fiscal 2026"), we divested our operations in France, our sole remaining operating entity in Europe, which previously comprised a third separate reporting segment. During the second quarter of the fiscal year ended January 31, 2026 ("fiscal 2025"), we divested our operations in Canada, which previously comprised a four th separate reporting segment. See Note 8, "Segment Information," for additional information. The information contained in these condensed consolidated financial statements refers to continuing operations unless otherwise noted.
Basis of Presentation and Consolidation
The accompanying condensed consolidated financial statements and notes are unaudited. The condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for fiscal 2025 filed with the Securities and Exchange Commission ("SEC") on March 24, 2026. Due to the seasonal nature of our business, our results of operations for the six months ended August 1, 2026 are not necessarily indicative of our future results for fiscal 2026.
Our fiscal year is composed of the 52 or 53 weeks ending on the Saturday closest to the last day of January. Fiscal 2026 consists of 52 weeks ending January 30, 2027. Fiscal 2025 consisted of 52 weeks ended on January 31, 2026. All six-month periods presented herein contain 26 weeks. All references to years, quarters and months relate to fiscal periods rather than calendar periods. The discussion and analysis of our results of operations refers to continuing operations unless otherwise noted.
Our business, like that of many retailers, is seasonal, with a significant portion of sales and operating profit realized during the fourth quarter of the fiscal year, which includes the holiday selling season. Although the fourth quarter remains our largest period, its relative contribution has moderated compared to historical levels.
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and accompanying footnotes. We regularly evaluate the estimates related to our assets and liabilities, contingent assets and liabilities, and the reported amounts of revenues and expenses. In preparing these condensed consolidated financial statements, we have made our best estimates and judgments of certain amounts recognized in the condensed consolidated financial statements, giving due consideration to materiality. Changes in the estimates and assumptions that we have used could have a significant impact on our financial results. Actual results could differ from those estimates.
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Table of Contents GAMESTOP CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except per share amounts)
(unaudited)
2. Summary of Significant Accounting Policies
Included below are certain updates related to policies included in Part II, Item 8 "Notes to Consolidated Financial Statements," Note 2, "Summary of Significant Accounting Policies," in the Annual Report on Form 10-K for fiscal 2025.
Cash, Cash Equivalents and Restricted Cash
Our Cash and cash equivalents are carried at cost, which approximates fair value, and consist primarily of cash, money market funds, cash deposits with commercial banks, and highly rated direct short-term instruments with an original maturity of 90 days or less. Our Restricted cash is also carried at cost, which approximates fair value, and consists primarily of bank deposits that collateralize our obligations to vendors and landlords.
The following table presents a reconciliation of Cash and cash equivalents and Restricted cash in our condensed consolidated balance sheets to total Cash and cash equivalents and Restricted cash in our condensed consolidated statements of cash flows:
| August 1, 2026 | August 2, 2025 | January 31, 2026 | ||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | |||||||||||||||||
Restricted cash(1) | ||||||||||||||||||||
Long-term restricted cash(2) | ||||||||||||||||||||
| Total cash, cash equivalents and restricted cash | $ | $ | $ | |||||||||||||||||
(1) Recognized in Prepaid expenses and other current assets on our condensed consolidated balance sheets.
(2) Recognized in Other noncurrent assets on our condensed consolidated balance sheets.
Marketable Securities
We have invested a portion of our excess cash in investment grade short-term fixed income securities, which primarily consist of U.S. government and agency securities, commercial paper, as well as time deposits. Investments with an original maturity in excess of 90 days and less than one year are classified as Marketable securities on our condensed consolidated balance sheets. We classify these investments as Available-for-sale debt securities and record them at fair value. Unrealized holding gains and losses are recognized in Accumulated other comprehensive loss on our condensed consolidated balance sheets. Realized gains and losses upon sale or extinguishment are reported in Other income, net in our condensed consolidated statements of operations. Each reporting period, we evaluate declines in fair value to determine whether they are attributable to expected credit losses and assess our ability and intent to hold the investment until recovery.
Derivative Asset and Related Equity Investment
During the first half of fiscal 2026, the Company entered into a series of paired put and call option transactions (the "Put/Call Pairs") that provided economic exposure to shares of eBay Inc. ("eBay") common stock, par value $0.001 per share ("eBay Common Stock").
During the first half of fiscal 2026, the Company entered into a series of paired put and call option transactions (the "Put/Call Pairs") that provided economic exposure to shares of eBay Inc. ("eBay") common stock, par value $0.001 per share ("eBay Common Stock").
Each Put/Call Pair, consisting of a non-transferable embedded purchased call option and a non-transferable embedded written put option entered into contemporaneously with the same counterparty, was accounted for as a single forward contract. Under the master agreement governing all Put/Call Pairs (the "Master Agreement"), all payment and share delivery obligations between the Company and the counterparty were subject to net settlement provisions.
The Put/Call Pairs were measured at fair value each reporting period, with changes in fair value recognized in Gain on derivative asset, net within the Company's condensed consolidated statements of operations as a component of non-operating income.
The Master Agreement provided for the exchange of cash collateral when the fair value of the Put/Call Pairs exceeded or fell below specified contractual thresholds. Cash collateral posted by the Company was held in restricted accounts in the Company's name but remained subject to the counterparty's control.
During the second quarter of fiscal 2026, the Company exercised all of the Put/Call Pairs and acquired direct beneficial ownership of the underlying shares of eBay Common Stock. Upon settlement, the Company derecognized the derivative asset and related collateral pledged under the Master Agreement and recognized an Equity investment on its condensed consolidated balance sheets.
The Equity investment has a readily determinable fair value and is classified as a Level 1 asset within the Accounting Standards Codification ("ASC") 820 fair value hierarchy. The investment is measured at fair value each reporting period, with changes in fair
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Table of Contents GAMESTOP CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except per share amounts)
(unaudited)
value recognized in Unrealized gain (loss) on equity investment within the condensed consolidated statements of operations in accordance with ASC 321.
See Note 10, "Derivative Asset and Related Equity Investment," for additional information.
Recent Accounting Pronouncements
Recently issued accounting pronouncements not yet adopted
In November 2024, the FASB issued ASU No. 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses", as clarified by ASU No. 2025-01, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40); Clarifying the Effective Date." (collectively, 'ASU No. 2024-03'). The guidance includes amendments to require public companies to provide additional disaggregated information about certain costs and expenses in a tabular format. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on the Company’s condensed consolidated financial statements and expects to provide additional disclosures upon adoption of this standard.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The ASU clarifies interim disclosure requirements and the applicability of Topic 270. The objective of the amendments is to provide further clarity about the current interim disclosure requirements. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Adoption of this ASU can be applied using either a prospective or a retrospective approach. Early adoption is permitted. We are currently evaluating the impact that the adoption of this ASU will have on our consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements. The ASU addresses thirty-three items, representing the changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements. Generally, the amendments in this update are not intended to result in significant changes for most entities. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2026. The adoption method of this ASU may vary, on an issue-by-issue basis. Early adoption is permitted. We are currently evaluating the impact that the adoption of this standard will have on our consolidated financial statements.
In April 2026, the FASB issued ASU No. 2026-01, Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends
on Equity-Classified Preferred Stock. The ASU provides guidance on how an issuer should initially measure paid-in-kind (PIK) dividends on equity-classified preferred stock. The amendments do not affect an entity's determination of when to recognize PIK dividends. The update requires that PIK dividends on equity-classified stock be initially measured on the basis of the PIK dividend rate stated in the preferred stock agreement. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2026. Early adoption is permitted in an interim or annual period. We are currently evaluating the provisions of this ASU and do not expect this ASU to have a material impact on our consolidated financial statements.
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Table of Contents GAMESTOP CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except per share amounts)
(unaudited)
3. Revenue
During the second quarter of fiscal 2026, we revised the significant product categories used to disaggregate Net sales to Collectibles, Pre-Owned and Refurbished, and Video Games. The significant categories previously used to disaggregate Net sales were Hardware and accessories, Software, and Collectibles. The revised categories reflect changes in the composition of our business and align the disclosure with how management currently evaluates sales performance. Consumer engagement has shifted toward collectibles and trading cards, which now represent our largest product category. Our pre-owned and refurbished products — sourced primarily through customer trade-ins and including products we repair or refurbish prior to resale — carry economics distinct from sales of new product, and were previously presented within two separate categories. In addition, an increasing proportion of software spending is fulfilled through digital delivery channels, which has narrowed the distinction between the previous Hardware and accessories and Software categories. The change in presentation had no effect on total Net sales, results of operations, financial position, or reportable segments. Prior period amounts have been recast to conform to the current period presentation.
The following table presents Net sales by significant product category:
__________________________________________________
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| August 1, 2026 | August 2, 2025 | August 1, 2026 | August 2, 2025 | |||||||||||||||||||||||
Collectibles(1) | $ | $ | $ | $ | ||||||||||||||||||||||
Video Games(2) | ||||||||||||||||||||||||||
Pre-Owned and Refurbished(3) | ||||||||||||||||||||||||||
| Total Net sales | $ | $ | $ | $ | ||||||||||||||||||||||
(1) Includes new and pre-owned trading cards and other collectible products; action figures, statues, replicas and other figures; apparel; plush, board games, building sets, and other toys; home goods; and other retail products for collectors and enthusiasts of gaming, entertainment and pop culture; and fees earned from facilitating the submission of customers' trading cards to a third-party authentication and grading service. Collectible products are classified in this category based on the nature of the product, irrespective of whether the product is new or pre-owned.
(2) Includes new video game hardware, accessories, and software (both physical and digital); digital currency, including platform points and gift cards redeemable for digital games and content; PC gaming products; and extended product warranties sold on new products.
(3) Includes pre-owned and refurbished video game hardware, physical video game software, accessories, and consumer electronics, acquired primarily through our customer trade-in programs and extended product warranties sold on pre-owned products. This category excludes pre-owned collectible products, which are included in Collectibles.
See Note 8, "Segment Information," for Net sales by geographic location.
Performance Obligations
We have arrangements with customers where our performance obligations are satisfied over time, which primarily relate to extended warranties and our GameStop Pro® rewards program.
We expect to recognize revenue in future periods for remaining performance obligations we have associated with unredeemed gift cards, trade-in credits, reservation deposits and loyalty points earned as part of our GameStop Pro® rewards program (collectively, "unredeemed customer liabilities"), extended warranties, and subscriptions to our GameStop Pro® rewards program. Effective July 15, 2026, we began phasing out the points-earning benefit of our GameStop Pro® Membership. Pro
Members whose membership purchase or renewal date is on or after July 15, 2026 no longer accumulate points through their
Pro Membership.
Performance obligations associated with unredeemed customer liabilities are primarily satisfied at the time customers redeem gift cards, trade-in credits, customer deposits or loyalty program points for products that we offer. Unredeemed customer liabilities are generally redeemed within one year of issuance.
We offer extended warranties on certain new and pre-owned products with terms generally ranging from 12 to 24 months, depending on the product. Revenues for extended warranties sold are recognized on a straight-line basis over the life of the contract.
Revenues for subscriptions to our GameStop Pro® rewards program are recognized on a straight-line basis over a 12-month subscription term.
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Table of Contents GAMESTOP CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except per share amounts)
(unaudited)
The following table presents our performance obligations recognized in Accrued liabilities and other current liabilities on our condensed consolidated balance sheets:
| August 1, 2026 | August 2, 2025 | |||||||||||||
| Unredeemed customer liabilities | $ | $ | ||||||||||||
| Extended warranties | ||||||||||||||
| Subscriptions | ||||||||||||||
| Total performance obligations | $ | $ | ||||||||||||
Significant Judgments and Estimates
We accrue loyalty points related to our GameStop Pro® rewards program at the estimated retail price per point, net of estimated breakage, which can be redeemed by loyalty program members for products we offer. The estimated retail price per point is based on the actual historical retail prices of products purchased through the redemption of loyalty points. We estimate breakage of loyalty points and unredeemed gift cards based on historical redemption rates.
Contract Balances
Our contract liabilities primarily consist of unredeemed customer liabilities and deferred revenues associated with gift cards, extended warranties and subscriptions to our GameStop Pro® rewards program.
The following table presents a roll forward of our contract liabilities:
__________________________________________________
| August 1, 2026 | August 2, 2025 | |||||||||||||
Contract liability fiscal year beginning balance | $ | $ | ||||||||||||
Increase to contract liabilities (1) | ||||||||||||||
Decrease to contract liabilities (2) | ( | ( | ||||||||||||
Other adjustments (3) | ||||||||||||||
| Contract liability ending balance | $ | $ | ||||||||||||
(1) Includes issuances of gift cards, trade-in credits and loyalty points, new reservation deposits, new subscriptions to our GameStop Pro® rewards program and extended warranties sold.
(2) Consists of redemptions and breakage of gift cards, and trade-in credits, redemptions and breakage of reservation deposits, and expiration of loyalty points. Additionally, this includes revenues recognized for our GameStop Pro® rewards program and extended warranties. During the six months ended August 1, 2026 and August 2, 2025, there were $41.1 million and $28.8 million, respectively, of gift cards redeemed that were previously outstanding as of January 31, 2026 and February 1, 2025, respectively.
4. Fair Value Measurements
Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Applicable accounting standards require disclosures that categorize assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. Each fair value measurement is reported in one of the following three levels:
•Level 1 inputs are quoted prices in active markets for identical assets or liabilities;
•Level 2 inputs are observable inputs other than quoted prices included in Level 1 for the asset or liability, either directly or indirectly through market-corroborated inputs; and
•Level 3 inputs are unobservable inputs for the asset or liability reflecting our assumptions about pricing by market participants.
Assets and Liabilities that Are Measured at Fair Value on a Recurring Basis
Assets and liabilities that are measured at fair value on a recurring basis include our cash equivalents, marketable securities, digital assets, digital assets receivable, derivative liabilities, equity investments, company-owned life insurance policies with a cash surrender value, and certain nonqualified deferred compensation liabilities.
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Table of Contents GAMESTOP CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except per share amounts)
(unaudited)
We measure the fair value of cash equivalents, certain marketable securities, equity investments and digital assets based on Level 1 inputs using quoted prices in active markets for identical assets. Other marketable securities were valued either based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data.
Our investments in time deposits are reported at fair value and utilize Level 1 inputs for measurement.
We measure the fair value of our digital assets receivable, life insurance policies with cash surrender values, derivative liability on digital assets and certain nonqualified deferred compensation liabilities based on Level 2 inputs using quotations provided by major market news services, such as Bloomberg, and industry-standard models that consider various assumptions, including quoted forward prices, time value, volatility factors, contractual prices for the underlying instruments, and other relevant economic measures, all of which are observable in active markets.
When appropriate, valuations are adjusted to reflect credit considerations, generally based on available market evidence.
The following tables present our assets and liabilities measured at fair value on a recurring basis:
| August 1, 2026 | ||||||||||||||||||||||||||
| Adjusted Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Level 1: | ||||||||||||||||||||||||||
Marketable securities(1) | $ | $ | $ | ( | $ | |||||||||||||||||||||
Digital assets(2) | ( | |||||||||||||||||||||||||
Equity investment(7) | ||||||||||||||||||||||||||
| Level 2: | ||||||||||||||||||||||||||
Digital assets receivable(2) | ( | |||||||||||||||||||||||||
Company-owned life insurance(3) | ||||||||||||||||||||||||||
| Total assets | $ | $ | $ | ( | $ | |||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
| Level 2: | ||||||||||||||||||||||||||
Derivative liability on digital assets and related receivable(4) | $ | $ | $ | $ | ||||||||||||||||||||||
Nonqualified deferred compensation(5) | ||||||||||||||||||||||||||
| Total liabilities | $ | $ | $ | $ | ||||||||||||||||||||||
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except per share amounts)
(unaudited)
| August 2, 2025 | ||||||||||||||||||||||||||
| Adjusted Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Level 1: | ||||||||||||||||||||||||||
Time deposits(6) | $ | $ | $ | $ | ||||||||||||||||||||||
Digital assets(2) | $ | |||||||||||||||||||||||||
| Level 2: | ||||||||||||||||||||||||||
Company-owned life insurance(3) | ||||||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | ||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
| Level 2: | ||||||||||||||||||||||||||
Nonqualified deferred compensation(5) | ||||||||||||||||||||||||||
| Total liabilities | $ | $ | $ | $ | ||||||||||||||||||||||
| January 31, 2026 | ||||||||||||||||||||||||||
| Adjusted Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Level 1: | ||||||||||||||||||||||||||
Marketable securities(1) | $ | $ | $ | $ | ||||||||||||||||||||||
Digital assets(2) | ( | |||||||||||||||||||||||||
| Level 2: | ||||||||||||||||||||||||||
Digital assets receivable(2) | ( | |||||||||||||||||||||||||
Company-owned life insurance(3) | ||||||||||||||||||||||||||
| Total assets | $ | $ | $ | ( | $ | |||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
| Level 2: | ||||||||||||||||||||||||||
Derivative liability on digital assets(4) | $ | $ | ( | $ | $ | |||||||||||||||||||||
Nonqualified deferred compensation(5) | ||||||||||||||||||||||||||
| Total liabilities | $ | $ | ( | $ | $ | |||||||||||||||||||||
(1) Recognized in "Marketable securities" on our condensed consolidated balance sheets.
(2) Recognized in "Digital assets and related receivables" on our condensed consolidated balance sheets. During fiscal 2025, the Company pledged a portion of its digital assets as collateral in connection with a covered‑call strategy, which resulted in the derecognition of the pledged digital assets and the corresponding recognition of a digital asset receivable.
(3) Recognized in "Other noncurrent assets" on our condensed consolidated balance sheets.
(4) Recognized in "Accrued liabilities and other current liabilities" on our condensed consolidated balance sheets. See Note 11, "Digital Assets and Related Receivables," for additional information.
(5) Recognized in "Accrued liabilities and other current liabilities" on our condensed consolidated balance sheets.
(6) Recognized in marketable securities and assets held for sale on our condensed consolidated balance sheets. During the second quarter of fiscal 2025 we reclassified $23.2 million of our marketable securities to assets held for sale, on our condensed consolidated balance sheets.
(7) Recognized as "Equity investment" on our condensed consolidated balance sheet. Represents the settlement-date fair value of shares received upon exercise of the Put/Call Pairs (cash paid of $3,955.2 million plus the fair value of the derivative asset derecognized upon settlement) plus the cost of shares acquired through open-market purchases. Cumulative gains recognized on the Put/Call Pairs prior to settlement were recognized in Gain on derivative asset, net.
Assets that Are Measured at Fair Value on a Nonrecurring Basis
Assets that are measured at fair value on a nonrecurring basis relate primarily to Property and equipment, Operating lease right-of-use ("ROU") assets and Other intangible assets, which are remeasured when the estimated fair value is below their carrying values. When we determine that impairment has occurred, the carrying value of the asset is reduced to its fair value. No such remeasurements were recorded during the current fiscal year.
The carrying values of our Cash, Restricted cash, Net receivables, Accounts payable and Current portion of debt approximate their fair values due to their short-term maturities.
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Table of Contents GAMESTOP CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except per share amounts)
(unaudited)
The fair value estimates of trade name intangibles and store-level property and equipment are based on significant unobservable inputs (Level 3) developed using company-specific information. These assets were valued using variations of the discounted cash flow method, which require assumptions associated with, among others, projected sales and cost estimates, capital expenditures, royalty rates, discount rates, terminal values and remaining useful lives.
During the first quarter of fiscal 2025, management approved a plan to divest the Company's operations in France. In connection with this plan, we reclassified the debt related to the French disposal group to Liabilities held for sale, within our condensed consolidated balance sheets. The debt had previously been included in the Company's consolidated debt balances and consisted of government-subsidized low interest French term loans maturing from October 2022 through October 2026 ("French Term Loans"). The sale of the French disposal group was completed during the second quarter of fiscal 2026.
5. Debt
As of August 1, 2026, August 2, 2025 and January 31, 2026, there was $4,167.8 million, $4,160.9 million and $4,164.3 million of outstanding debt, respectively.
Convertible Senior Notes
Convertible 2030 Notes
On April 1, 2025, we completed a private offering of $1,500.0 million aggregate principal amount of our 0.00 % Convertible Senior Notes due 2030 Notes (the "2030 Notes"), including the exercise in full of the initial purchaser's option to purchase up to an additional $200 million aggregate principal amount of the 2030 Notes. The 2030 Notes are general unsecured obligations of the Company. The 2030 Notes were issued pursuant to an Indenture, dated April 1, 2025, between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). As of August 1, 2026, the balance of the 2030 Notes, net of debt issuance costs of $14.4 million was $1,485.6 million. The Company determines the fair value of its 2030 Notes in accordance with ASC 820, Fair Value Measurement, using observable market inputs on a secondary market exchange (Level 2 input). As of August 1, 2026, the fair value of the 2030 Notes was approximately $1,509.8 million.
Convertible 2032 Notes
On June 17, 2025, we completed a private offering of $2,250.0 million aggregate principal amount of our 0.00 % Convertible Senior Notes due 2032 (the "2032 Notes", and together with the 2030 Notes, the “Convertible Notes”), plus the exercise in full of the initial purchaser’s option to purchase up to an additional $450.0 million aggregate principal amount of the 2032 Notes. The 2032 Notes are general unsecured obligations of the Company. The 2032 Notes were issued pursuant to an Indenture, dated June 17, 2025, between the Company and the Trustee, as trustee. As of August 1, 2026, the balance of the 2032 Notes, net of debt issuance costs of $17.8 million was $2,682.2 million. The Company determines the fair value of its 2032 Notes in accordance with ASC 820, Fair Value Measurement, using observable market inputs on a secondary market exchange (Level 2 input). As of August 1, 2026, the fair value of the 2032 Notes was approximately $2,701.2 million.
Credit Facilities
We maintain uncommitted letter of credit facilities with certain banks that provide for the issuance of letters of credit and bank guarantees, at times supported by cash collateral. See Note 6, "Commitments and Contingencies," for further information regarding outstanding stand-by letters of credit and other bank guarantees.
6. Commitments and Contingencies
Commitments
As of August 1, 2026, we had approximately $4.6 million of outstanding stand-by letters of credit and other bank guarantees supported by $4.6 million of cash collateral that is included in restricted cash.
Legal Proceedings
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Table of Contents GAMESTOP CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except per share amounts)
(unaudited)
In the ordinary course of business, we are, from time to time, subject to various legal proceedings, including matters involving wage and hour employee class actions, stockholder actions, and consumer class actions, violent acts, and other conflicts. We may enter into discussions regarding settlement of these and other types of lawsuits, and may enter into settlement agreements, if we believe settlement is in the best interest of our stockholders. We do not believe that any such existing legal proceedings or settlements, individually or in the aggregate, will have a material effect on our financial condition, results of operations or liquidity.
7. Earnings Per Share
Basic Net income per common share is computed by dividing the Net income available to Class A common stockholders by the weighted-average number of common shares outstanding during the period. Diluted Net income per common share is computed by dividing the Net income available to Class A common stockholders by the weighted-average number of common shares outstanding and potentially dilutive securities outstanding during the period. Potentially dilutive securities include shares from Convertible Notes, stock options, Warrants, unvested restricted stock and unvested restricted stock units outstanding during the period, using the treasury stock method. Potentially dilutive securities are excluded from the computations of diluted earnings per share if their effect would be anti-dilutive. For example, the Warrants are anti-dilutive and excluded from the diluted earnings per share computations primarily because the exercise price is significantly above the average market price. A Net loss from continuing operations causes all potentially dilutive securities to be anti-dilutive.
The following table presents a reconciliation of shares used in calculating basic and diluted Net income (loss) per common share:
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| August 1, 2026 | August 2, 2025 | August 1, 2026 | August 2, 2025 | |||||||||||||||||||||||
| Weighted-average common shares outstanding | ||||||||||||||||||||||||||
Dilutive effect of stock-based awards | ||||||||||||||||||||||||||
Dilutive effect of Convertible Notes | ||||||||||||||||||||||||||
| Weighted-average diluted common shares | ||||||||||||||||||||||||||
| Anti-dilutive shares: | ||||||||||||||||||||||||||
| Warrants to purchase common stock | ||||||||||||||||||||||||||
| Restricted stock units | ||||||||||||||||||||||||||
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Table of Contents GAMESTOP CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except per share amounts)
(unaudited)
8. Segment Information
Effective July 8, 2026, we operate our business in two geographic segments: United States and Australia. During the second quarter of fiscal 2026, we divested our operations in France, which represented our remaining operating entity in Europe, and previously comprised a third separate reporting segment. During the second quarter of fiscal 2025, we divested our operations in Canada, which previously comprised a four th separate reporting segment.
We identified segments based on a combination of geographic areas and management responsibility. Segment results for the United States include retail operations in 50 states; our ecommerce website www.gamestop.com; and our GameStop Pro® loyalty program. The United States segment also includes general and administrative expenses related to our corporate offices in Grapevine, Texas.
Segment results for Canada reflect retail and ecommerce operations previously conducted in Canada, which were divested during the second quarter of fiscal 2025.
Segment results for Australia include retail and ecommerce operations in Australia. These results also previously included operations in New Zealand, which were closed during the fourth quarter of fiscal 2025.
Current year segment results for Europe include retail and ecommerce operations previously conducted in France, which were divested during the second quarter of fiscal 2026. Segment results for Europe also previously included retail operations in Italy, Germany, Austria, Ireland and Switzerland, all of which were closed or divested prior to fiscal 2025.
Our chief operating decision makers (“CODM”) are our Chief Executive Officer and our Principal Financial and Accounting Officer, who have responsibility for allocating resources and assessing performance for the operating segments. Our CODM measures segment profit using Operating income (loss), which is defined as Net income (loss) adjusted to exclude non‑operating items, including Interest income, net, Income tax expense (benefit), Gain on derivative asset, net, Loss (gain) on digital assets and related receivables, Unrealized gain on equity investment, and Other income, net.
Transactions between our reportable segments consist primarily of royalties, management fees, intersegment loans and related interest. There were no material intersegment sales during the three and six months ended August 1, 2026 and August 2, 2025. Information on total assets by segment is not disclosed as such information is not used by our CODM to evaluate segment performance or to allocate resources and capital.
The following tables present segment information:
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Table of Contents GAMESTOP CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except per share amounts)
(unaudited)
| United States | Australia | Europe | Total | |||||||||||||||||||||||
| As of and for the three months ended August 1, 2026 | ||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Cost of sales | ||||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||||
| Selling, general and administrative expenses: | ||||||||||||||||||||||||||
Store related | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Asset impairments | ( | ( | ||||||||||||||||||||||||
| Operating income (loss) | ( | |||||||||||||||||||||||||
Interest income, net | ( | |||||||||||||||||||||||||
| Gain on derivative asset, net | ( | |||||||||||||||||||||||||
| Loss on digital assets and related receivables | ||||||||||||||||||||||||||
| Unrealized gain on equity investment | ( | |||||||||||||||||||||||||
Other income, net | ( | |||||||||||||||||||||||||
| Income before income taxes | ||||||||||||||||||||||||||
| Income tax expense | ||||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||
| Property and equipment, net | ||||||||||||||||||||||||||
| Capital expenditures | $ | $ | $ | $ | ||||||||||||||||||||||
| United States | Australia | Europe | Total | |||||||||||||||||||||||
| As of and for the three months ended August 2, 2025 | ||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Cost of sales | ||||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||||
| Selling, general and administrative expenses: | ||||||||||||||||||||||||||
| Store related | ||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||
| Asset impairments | ( | ( | ||||||||||||||||||||||||
| Operating income (loss) | ( | |||||||||||||||||||||||||
Interest income, net | ( | |||||||||||||||||||||||||
| Unrealized gain on digital assets | ( | |||||||||||||||||||||||||
| Income before income taxes | ||||||||||||||||||||||||||
Income tax expense | ||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||
Property and equipment, net (1) | ||||||||||||||||||||||||||
| Capital expenditures | $ | $ | $ | $ | ||||||||||||||||||||||
(1) Property and equipment, net for France (Europe) is classified as Assets held for sale on our condensed consolidated balance sheets.
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Table of Contents GAMESTOP CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except per share amounts)
(unaudited)
| United States | Australia | Europe | Total | |||||||||||||||||||||||
| As of and for the six months ended August 1, 2026 | ||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Cost of sales | ||||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||||
| Selling, general and administrative expenses: | ||||||||||||||||||||||||||
| Store related | ||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||
Asset impairments | ( | ( | ||||||||||||||||||||||||
| Operating income (loss) | ( | |||||||||||||||||||||||||
Interest income, net | ( | |||||||||||||||||||||||||
| Gain on derivative asset, net | ( | |||||||||||||||||||||||||
| Loss on digital assets and related receivables | ||||||||||||||||||||||||||
| Unrealized gain on equity investment | ( | |||||||||||||||||||||||||
| Other income, net | ( | |||||||||||||||||||||||||
| Income before income taxes | ||||||||||||||||||||||||||
| Income tax expense | ||||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||
| Property and equipment, net | ||||||||||||||||||||||||||
| Capital expenditures | ||||||||||||||||||||||||||
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Table of Contents GAMESTOP CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except per share amounts)
(unaudited)
| United States | Canada | Australia | Europe | Total | ||||||||||||||||||||||||||||
| As of and for the six months ended August 2, 2025 | ||||||||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Cost of sales | ||||||||||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses: | ||||||||||||||||||||||||||||||||
Store related | ||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||
Asset impairments | ||||||||||||||||||||||||||||||||
| Operating income (loss) | ( | ( | ||||||||||||||||||||||||||||||
Interest income, net | ( | |||||||||||||||||||||||||||||||
| Unrealized gain on digital assets | ( | |||||||||||||||||||||||||||||||
| Other income, net | ( | |||||||||||||||||||||||||||||||
| Income before income taxes | ||||||||||||||||||||||||||||||||
| Income tax expense | ||||||||||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||||||||
Property and equipment, net(1) | ||||||||||||||||||||||||||||||||
| Capital expenditures | ||||||||||||||||||||||||||||||||
(1) Property and equipment, net for France (Europe) is classified as Assets held for sale on our condensed consolidated balance sheets.
9. Assets Held for Sale
During the first quarter of fiscal 2025, management approved a plan to divest the Company’s operations in Canada and France.
During the second quarter of fiscal 2025, the Company completed the sale of its Canadian subsidiary, Electronics Boutique Canada, Inc., which operated its Canadian retail stores and e-commerce business. Prior to the sale, the assets and liabilities of the Canadian operations were classified as held for sale in the Company’s condensed consolidated balance sheets. Upon completion of the sale, those assets and liabilities were derecognized and are no longer reflected in held-for-sale balances in subsequent periods. The proceeds from the sale and related loss on disposal were immaterial to our financial statements.
During the second quarter of fiscal 2026, the Company completed the sale of its French subsidiary, Micromania GameStop SAS, which together with its subsidiaries operated its French retail stores and e-commerce business. Prior to the sale, the assets and liabilities of its French operations were classified as held for sale in the Company's condensed consolidated balance sheets. Upon completion of the sale, those assets and liabilities were derecognized and are no longer reflected in held-for-sale balances in subsequent periods. The proceeds from the sale and related loss were immaterial to our financial statements.
There were no assets and liabilities classified as held for sale as of August 1, 2026. The assets and liabilities classified as held for sale as of August 2, 2025 and January 31, 2026 relate solely to the France operations. The components are as follows:
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Table of Contents GAMESTOP CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except per share amounts)
(unaudited)
| August 1, 2026 | August 2, 2025 | January 31, 2026 | |||||||||||||||
| Assets Held for Sale | |||||||||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||||||||
| Marketable Securities | $ | $ | $ | ||||||||||||||
| Receivables, net | |||||||||||||||||
| Merchandise inventories, net | |||||||||||||||||
| Prepaid expenses and other current assets | |||||||||||||||||
| Property and equipment, net | |||||||||||||||||
| Operating lease right-of-use-assets | |||||||||||||||||
| Other noncurrent assets | |||||||||||||||||
| Total assets held for sale (gross) | |||||||||||||||||
| Less: Impairment loss | ( | ( | |||||||||||||||
| Total assets held for sale (net) | $ | $ | $ | ||||||||||||||
| Liabilities held for sale | |||||||||||||||||
| Current liabilities | $ | $ | $ | ||||||||||||||
| Noncurrent liabilities | |||||||||||||||||
| Total liabilities held for sale | $ | $ | $ | ||||||||||||||
Based on the estimated fair value of these businesses, less costs to sell, the Company recognized an impairment charge of $33.4 million on assets held for sale related to the French and Canadian disposal groups during the first half of fiscal 2025.
For fiscal 2025 and the first half of fiscal 2026, the Company recognized net impairment charges of $29.8 million and a net impairment reversal of $6.9 million, respectively, primarily related to the French disposal group. These amounts reflect the remeasurement of the carrying value of the French disposal group to fair value, less costs to sell, and include the impact of currency translation adjustments previously recorded in Accumulated other comprehensive income.
10. Derivative Asset and Related Equity Investment
Derivative Asset
On May 3, 2026, the Company submitted a non-binding proposal (the "Proposal") to acquire 100 % of the outstanding shares of eBay for $125.00 per share in a transaction consisting of cash and Company stock.
In connection with the Proposal, during the first half of fiscal 2026, the Company entered into the Put/Call Pairs providing economic exposure to 39,046,658 shares of eBay Common Stock. Each Put/Call Pair, consisting of a non-transferable embedded purchased call option and a non-transferable embedded written put option entered into contemporaneously with the same counterparty, was accounted for as a single forward contract.
The Put/Call Pairs were settleable solely in cash until the Company provided the counterparty with evidence that all applicable filings had been made and any required waiting periods had expired or approvals had been obtained under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act Condition"). The HSR Act Condition was satisfied on June 3, 2026.
The Company presented the gross fair value of the Put/Call Pairs as a Derivative asset and any related cash collateral as Collateral pledged for derivative asset in its condensed consolidated balance sheets.
For the three and six months ended August 1, 2026, the Company recognized gains on the derivative asset, net, of $166.3 million and $434.7 million, respectively, in its condensed consolidated statements of operations as a component of non-operating income.
Equity Investment
On July 15, 2026, the Company exercised all outstanding Put/Call Pairs and acquired direct beneficial ownership of 39,046,658 shares of eBay Common Stock for aggregate cash consideration of $3,955.2 million, reflecting an average strike price of $101.30 per share. Upon settlement, the Company derecognized the derivative asset and recognized the shares received at their settlement-date fair value of $4,402.9 million, comprising the cash paid upon exercise and the $447.7 million fair value of the
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except per share amounts)
(unaudited)
derivative asset derecognized. The $983.3 million of cash collateral previously pledged under the Master Agreement was returned to the Company upon settlement. During the six months ended August 1, 2026, the Company recognized $40.1 million of transaction costs and $1.2 million of execution fees associated with the Put/Call Pairs within Gain on derivative asset, net.
In addition, the Company acquired 4,343,725 shares of eBay Common Stock through open-market purchases for aggregate cash consideration of $472.3 million, or an average of $108.73 per share.
As of August 1, 2026, the Company beneficially owned an aggregate of 43,390,383 shares of eBay Common Stock, representing approximately 9.8 % of the outstanding eBay Common Stock, with a fair value of approximately $4.9 billion. The investment is classified as a noncurrent Equity investment on the condensed consolidated balance sheets, reflecting management's intent to hold the investment on a long-term basis.
For the three and six months ended August 1, 2026, the Company recognized an Unrealized gain on equity investment of $72.1
The following table presents the Company's total aggregate cost basis in the eBay Common Stock, which reflects the cash paid to acquire the shares, and its relationship to the fair value of the investment as of August 1, 2026:
| # of Shares | Price Per Share | Aggregate Value | ||||||||||||||||||
Cash paid on settlement of Put/Call Pairs(1) | $ | $ | ||||||||||||||||||
Less: Funding and execution costs(2) | ( | |||||||||||||||||||
| Cost basis - option-delivered shares | ||||||||||||||||||||
| Direct open-market purchases | ||||||||||||||||||||
| Total aggregate cost basis | ||||||||||||||||||||
Fair value at August 1, 2026 ($ | ||||||||||||||||||||
| Cumulative appreciation over cost basis | ||||||||||||||||||||
(1) At the average strike price per share.
Of the $560.6 million of cumulative appreciation over cost basis, $488.9 million was recognized in Gain on derivative asset, net, as changes in the fair value of the Put/Call Pairs prior to and upon settlement (before $54.2 million of related fees and transaction costs recognized in the same line), and $72.1 million was recognized in Unrealized gain on equity investment following settlement. Cost basis is a supplemental measure and differs from the carrying value of the Equity investment, which is measured at fair value with changes recognized in earnings.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except per share amounts)
(unaudited)
11. Digital Assets and Related Receivables
The Company measures its in-scope Digital assets at fair value under ASC 350-60 with fair value determined in accordance with ASC 820. Bitcoin is initially recorded at cost, and subsequently remeasured using unadjusted quoted prices in the principal market that we have identified for Bitcoin (currently, the Coinbase exchange), which we consider an active market. Because the fair value is derived from quoted prices for an identical asset in an active market, Bitcoin is classified within Level 1 of the fair value hierarchy. Unrealized gains and losses from changes in Bitcoin's fair value are recognized in the condensed consolidated statements of operations as Gain on digital assets and related receivables, and are presented as nonoperating activity.
During the second quarter of fiscal 2025, the Company purchased 4,710 Bitcoin.
During the fourth quarter of fiscal 2025, the Company entered into an agreement (the "Collateral Agreement") with Coinbase Credit, Inc. ("Coinbase"), under which the Company sold covered call options on a portion of the Bitcoin it owns. The options are accounted for as derivatives under ASC 815 and are not designated as hedging instruments.
Our covered-call contracts are over-the-counter ("OTC") derivatives entered into with Coinbase and are typically short-dated. Under the agreements, Bitcoin is pledged as collateral and can be rehypothecated, re-pledged, or otherwise deployed by Coinbase. As of August 1, 2026, we had outstanding covered-call option contracts referencing approximately 2,000 Bitcoin, with a strike price of $70,000 and a maturity extending through September 25, 2026. These contracts resulted in a derivative liability on digital assets and related receivables of $2.0 million as of August 1, 2026, which is presented within Accrued liabilities and other current liabilities. During the first half of fiscal 2026, changes in the fair value of covered-call option contracts, including contracts that matured prior to August 1, 2026, resulted in a gain of approximately $13.8 million. No derivative assets were recognized as of the reporting date related to covered-call options. Premiums received at inception are initially recorded on the condensed consolidated balance sheets and subsequently reflected in earnings consistent with the subsequent fair value changes of the related options.
The fair value of these written options is measured using standard option-pricing models incorporating observable market inputs, including Bitcoin spot prices, implied volatility, and time to expiration. As such, the options are classified as Level 2 within the fair value hierarchy. Changes in the fair value of the options are recognized in earnings within Other income, net, classified as nonoperating activity. This presentation is consistent with the treatment of fair value changes related to our Digital assets and related receivables, which are recognized in earnings within "Gain (loss) on digital assets and related receivables," also classified as nonoperating activity.
In connection with the covered-call strategy, the Company pledged 4,709 Bitcoin (the "Pledged Bitcoin") as collateral. Under the terms of the Collateral Agreement, Coinbase maintains the right to rehypothecate, commingle, or unilaterally sell the Pledged Bitcoin, and the Company concluded that control of the Pledged Bitcoin transferred to Coinbase. Accordingly, during the fourth quarter of fiscal 2025, the Company derecognized the Pledged Bitcoin and recognized a Digital assets receivable representing the fair value of its contractual right to receive equivalent Bitcoin in the future. The Digital assets receivable is presented within Digital assets and related receivables on the condensed consolidated balance sheets as of both August 1, 2026 and January 31, 2026, and remains subject to the Collateral Agreement. The receivable is due within the next 12 months and accordingly is classified as a current asset.
The Digital assets receivable is remeasured at fair value at each reporting date in accordance with ASC 820. The receivable's fair value is determined using Level 2 inputs, specifically the unadjusted quoted prices in active markets for the underlying crypto asset (Bitcoin). While the value of the receivable is directly derived from the market price of Bitcoin, the receivable itself is not a traded instrument; therefore, it is classified within Level 2 of the fair value hierarchy. Changes in the fair value of the Digital assets receivable are recognized within Gain on digital assets and related receivables in the condensed consolidated statements of operations and are presented as nonoperating activity.
The following table presents the Company's digital asset holdings as of August 1, 2026:
Quantity(1) | Cost Basis | Fair Value | Cumulative Unrealized Gain (Loss) | |||||||||||||||||||||||
Bitcoin | ( | |||||||||||||||||||||||||
| Total digital assets held as of August 1, 2026 | $ | $ | $ | ( | ||||||||||||||||||||||
__________________________________________________
The Company recorded a loss of $75.0 million and $73.9 million, respectively, on Digital assets and related receivables during the three and six months ended August 1, 2026. The Company did not purchase or sell any Bitcoin during the first half of fiscal 2026.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except per share amounts)
(unaudited)
12. Income Taxes
Our interim tax provision was determined using an estimated annual effective tax rate ("AETR") applied to ordinary pre-tax income, adjusted for the tax effects of discrete items recognized during the six months ended August 1, 2026.
We recognized income tax expense of $121.5 million for the three months ended August 1, 2026, representing an effective tax rate of 28.9 %, compared to income tax expense of $6.0 million, or an effective tax rate of 3.4 %, for the three months ended August 2, 2025.
The increase in income tax expense was driven primarily by significantly higher pre-tax income for the three months ended August 1, 2026. The increase in the effective tax rate reflects that the prior-year period benefited from the utilization of U.S. net operating loss carryforwards and the related release of valuation allowances, which were substantially exhausted by the end of fiscal 2025. The difference between our effective tax rate and the U.S. federal statutory rate of 21% is primarily attributable to state income taxes and losses for which no corresponding tax benefit was recognized.
We recognized income tax expense of $238.3 25.7 %, compared to income tax expense of $9.5 million, or an effective tax rate of 4.3 %, for the six months ended August 2, 2025.
The increase in income tax expense was driven primarily by significantly higher pre-tax income for the six months ended August 1, 2026. The increase in the effective tax rate reflects that the prior-year period benefited from the utilization of U.S. net operating loss carryforwards and the related release of valuation allowances, which were substantially exhausted by the end of fiscal 2025. The difference between our effective tax rate and the U.S. federal statutory rate of 21% is primarily attributable to state income taxes and losses for which no corresponding tax benefit was recognized.
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the United States. The legislation makes permanent certain expiring provisions of the Tax Cuts and Jobs Act, modifies the U.S. international tax framework, and restores certain favorable business tax provisions. The OBBBA's provisions take effect on various dates between 2025 and 2027. The Company has evaluated the legislation and does not expect it to have a material impact on its estimated fiscal 2026 effective tax rate. The Company will continue to monitor implementing guidance and regulations.
13. Related Party Transactions
One of the Company's directors, Nat Turner, also serves as the Chairman and Chief Executive Officer of Collectors Holdings, Inc. ("Collectors"), the parent company of Professional Sports Authenticator ("PSA"). As a result, Collectors and PSA are considered related parties under ASC 850, Related Party Disclosures.
During the third quarter of the fiscal year ended February 1, 2025, the Company announced that it had entered into a collaboration with Collectors through its PSA division. Under this arrangement, the Company became an authorized PSA dealer, and PSA provides authentication and grading services for trading cards through select GameStop stores across the United States.
During the second quarter of fiscal 2025, the Company launched Power Packs, a digital trading card platform developed in collaboration with PSA.
Transactions with Collectors and PSA were not material, individually or in the aggregate, during the first two quarters of fiscal 2026 and 2025.
One of the Company's directors, Nat Turner, also serves as the Chairman and Chief Executive Officer of Collectors Holdings, Inc. ("Collectors"), the parent company of Professional Sports Authenticator ("PSA"). As a result, Collectors and PSA are considered related parties under ASC 850, Related Party Disclosures.
During the third quarter of the fiscal year ended February 1, 2025, the Company announced that it had entered into a collaboration with Collectors through its PSA division. Under this arrangement, the Company became an authorized PSA dealer, and PSA provides authentication and grading services for trading cards through select GameStop stores across the United States.
During the second quarter of fiscal 2025, the Company launched Power Packs, a digital trading card platform developed in collaboration with PSA.
Transactions with Collectors and PSA were not material, individually or in the aggregate, during the first two quarters of fiscal 2026 and 2025.
14. Share Repurchase Program
During the second quarter of fiscal 2026, the Board approved a new discretionary $2.0 billion share repurchase authorization to replace the previous share repurchase authorization. Under the new share repurchase authorization, the Company may repurchase shares of its Class A common stock from time to time in compliance with SEC regulations and other legal requirements, and subject to market conditions and other factors. The repurchase authorization does not require the Company to acquire any specific number of shares and may be terminated at any time. The new share repurchase authorization expires on June 2, 2029.
During the second quarter of fiscal 2026, the Board approved a new discretionary $
15. Subsequent Events
On August 2, 2026, the Company entered into (i) privately negotiated exchange agreements (the “2030 Notes Exchange Agreements”) with a limited number of existing holders (the “2030 Existing Noteholders”) of its 2030 Notes, and (ii) privately negotiated exchange agreements (the “2032 Notes Exchange Agreements” and, together with the 2030 Notes Exchange Agreements, the “Exchange Agreements”) with a limited number of existing holders (the “2032 Existing Noteholders” and, together with the 2030 Existing Noteholders, the “Existing Noteholders”) of its 2032 Notes, in each case relating to the exchange
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Table of Contents GAMESTOP CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except per share amounts)
(unaudited)
(the “Exchange”) of such 2030 Notes and 2032 Notes held by the Existing Noteholders for shares of the Company’s Class A common stock. Pursuant to the Exchange Agreements, the Company agreed to exchange approximately (i) $400 million aggregate principal amount of the outstanding 2030 Notes, and (ii) $1.0 billion aggregate principal amount of the outstanding 2032 Notes (collectively, the “Exchange Notes”) held by the Existing Noteholders.
On August 31, 2026, the Company entered into amendments to each of the Exchange Agreements (the “Amendments”). As originally structured, the Exchange was to be settled entirely in shares of Class A common stock, with the number of shares based in part on the volume-weighted average price of the Class A common stock over a 35 trading day reference period that began on August 3, 2026 (the “Reference Period”). As amended, the remainder of the Reference Period is terminated. Consideration attributable to the elapsed portion of the Reference Period will still be settled in shares, and the remaining consideration will be settled in cash, in an amount based on trading prices on the last trading day prior to the Amendments. The Exchange closed on September 3, 2026. In total, the Existing Noteholders received in the aggregate approximately 55.5 million shares of Class A common stock and approximately $358.4 million in cash.
GameStop expects to recognize a non-cash charge in connection with the Exchange.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the information contained in our condensed consolidated financial statements, including the notes thereto set forth in Part I, Item 1 of this Form 10-Q. Statements regarding future economic performance, management’s plans and objectives, and any statements concerning assumptions related to the foregoing contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations constitute forward-looking statements. These statements are only predictions based on current expectations and assumptions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. All forward-looking statements included in this Form 10-Q are based upon information available to us as of the filing date of this Form 10-Q, and we undertake no obligation to update or revise any of these forward-looking statements for any reason, whether as a result of new information, future events or otherwise after the date of this Form 10-Q, except as required by law. You should not place undue reliance on these forward-looking statements. The forward-looking statements involve a number of risks and uncertainties. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Certain factors, which may cause actual results to vary materially from these forward-looking statements, accompany such statements and are discussed in our 2025 Annual Report on Form 10-K for the year ended January 31, 2026 (the “2025 Annual Report on Form 10-K”), including the disclosures under Part I, Item 1A "Risk Factors."
OVERVIEW
GameStop Corp. ("GameStop," "we," "us," "our" or the "Company"), a Delaware corporation established in 1996, offers games, collectibles, and entertainment products through its stores and ecommerce platforms. As we navigate the evolving commercial landscape, our business model is expanding beyond traditional retail to include value creation through disciplined capital allocation, and we view our significant cash and other sources of liquidity as a strategic asset to be deployed into investments, acquisitions, and control transactions that we believe offer long-term value.
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BUSINESS PRIORITIES
Our strategy has evolved into two distinct but complementary pillars:
•Capital Allocation: Utilizing our significant capital resources to actively evaluate and execute on opportunities to acquire, invest in, or partner with businesses that offer long-term value.
•Operational Excellence: Maximizing the cash flow of our legacy retail business by optimizing our store fleet.
Capital Deployment and Investment Strategy
The Company views its balance sheet as a strategic asset. We continue to review the best use for our cash and other sources of liquidity, including potential control transactions and transformational acquisitions.
While we do not limit our review to specific industries, our Investment Committee is actively evaluating opportunities that offer long-term value.
Investment Policy & Guidelines
Investments are made in accordance with the guidelines of an Investment Policy that is reviewed at least annually by the Company’s Board of Directors (the “Board”). Permissible investment instruments include cash and cash equivalents (e.g., bank obligations, money market funds, and commercial paper), fixed income securities (e.g., obligations of the U.S. Treasury), equity securities (limited to those listed on major exchanges), derivative instruments and options, and certain crypto-currencies, including Bitcoin.
To ensure the Company can act on these opportunities with speed and efficiency, the Board has delegated authority to an Investment Committee of the Board to manage the Company’s cash and other sources of liquidity and to review potential acquisition and control opportunities.
•Structure: The Committee consists of the Company’s Chairman and Chief Executive Officer, Ryan Cohen, and two independent members of the Board.
•Alignment of Interests: Depending on certain market conditions and various risk factors, Mr. Cohen or other members of the Investment Committee, each in their personal capacity or through affiliated investment vehicles, may at times invest in the same securities in which the Company invests. The Board anticipates that such investments will align the interests of the Company with the interests of related parties because they place the personal resources of such directors at risk in substantially the same manner as resources of the Company.
Retail Business
We are optimizing our retail footprint. We view our extensive domestic network of physical locations not merely as stores, but as fulfillment and service anchors that provide immediate capabilities.
Expand Our Addressable Market
The Company continues to explore ways to increase the size of its addressable market through new product and service offerings.
•Strategic Validation: Our recent initiatives support our view that consumers value transactional speed and convenience. By utilizing our stores as efficient trade-in destinations, we have demonstrated that our infrastructure can drive transaction volume and customer engagement.
•The Network Effect: We believe our dense store network serves as a competitive advantage.
Maximize Profitability
The Company continues to focus on cost containment to maximize operating income.
•Indirect Spend: We have focused on eliminating non-income generating spend. In fiscal 2025, we significantly reduced indirect costs and intend to continue this discipline in 2026.
•International Streamlining: We continue to evaluate our international assets for strategic relevance. In the past three years, the Company has exited operations in Ireland, Switzerland, Austria, Germany, New Zealand, Italy, Canada and France.
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•Store Fleet Optimization: Each year, the Company performs a comprehensive store portfolio optimization review which involves identifying stores for closure based on many factors, including an evaluation of current market conditions and individual store performance. This review resulted in the closure of 727 stores in the United States in fiscal 2025. At this time, we do not anticipate closing a significant number of stores in fiscal 2026, as we view our domestic footprint as a core component of our logistics infrastructure strategy.
Forward-Looking Statement on Acquisitions
While the Company has no binding agreements for a specific transaction at this time, we are actively evaluating opportunities that could require significant capital deployment. Shareholders should understand that our strategy is now explicitly focused on leveraging our cash, flexible capital structure, and stock to acquire assets that we believe will undergo a significant re-rating under our stewardship.
While the Company has no binding agreements for a specific transaction at this time, we are actively evaluating opportunities that could require significant capital deployment. Shareholders should understand that our strategy is now explicitly focused on leveraging our cash, flexible capital structure, and stock to acquire assets that we believe will undergo a significant re-rating under our stewardship.
Second Quarter Developments
During the second quarter of fiscal 2026, we continued to advance the strategic priorities we pursued throughout fiscal 2025 and the first quarter of fiscal 2026.
Consistent with our focus on the growth of collectibles, we continued to expand store space and roll out new fixtures dedicated to the category to support in-store collectibles sales. As a result of our efforts in this area, our Collectibles product category increased to 45.1% of our Net Sales in the second quarter of fiscal 2026 compared to 23.4% in the second quarter of fiscal 2025.
We also continued our profit optimization efforts during the quarter, including further reductions in selling, general and administrative expenses through ongoing cost discipline and indirect-spend initiatives.
Our balance sheet continued to reflect the proceeds of our 0.00% Convertible Senior Notes due 2030 (the “2030 Notes”) and 0.00% Convertible Senior Notes due 2032 (the “2032 Notes”, and together with the 2030 Notes, the “Convertible Notes”), and our Bitcoin treasury reserve holdings and related receivables. Total Cash, cash equivalents, Marketable securities, Digital assets and related receivables were $5,354.4 million as of August 1, 2026. This total included $4,854.3 million of Cash and cash equivalents, $206.0 million of Marketable securities, and approximately $294.1 million in Digital assets and related receivables.
During the quarter, our Board of Directors approved a new discretionary $2.0 billion share repurchase authorization, replacing the previous authorization then in effect. As of August 1, 2026, we had not repurchased any shares of our Class A common stock under the new authorization.
We converted our previously disclosed derivative position related to eBay Inc. ("eBay") into a direct equity investment, resulting in a decrease in cash, cash equivalents, and marketable securities. As of August 1, 2026, we held approximately 43.4 million shares of eBay common stock, par value $0.001 per share ("eBay Common Stock") with a fair value of approximately $4.9 billion. We also recorded a $75.0 million loss on Digital assets and related receivables during this quarter, reflecting a decline in the market price of Bitcoin.
Consistent with our international streamlining efforts, we completed the divestiture of our operations in France.
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CONSOLIDATED RESULTS OF OPERATIONS
The following table presents certain statement of operations items and as a percentage of Net sales:
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||
| August 1, 2026 | August 2, 2025 | Change | ||||||||||||||||||||||||||||||||||||
| Amount | Percent of Net Sales | Amount | Percent of Net Sales | $ | % | |||||||||||||||||||||||||||||||||
| Net sales | $ | 790.2 | 100.0 | % | $ | 972.2 | 100.0 | % | $ | (182.0) | (18.7) | % | ||||||||||||||||||||||||||
| Cost of sales | 445.2 | 56.3 | 689.1 | 70.9 | (243.9) | (35.4) | ||||||||||||||||||||||||||||||||
| Gross profit | 345.0 | 43.7 | 283.1 | 29.1 | 61.9 | 21.9 | ||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 187.1 | 23.7 | 218.8 | 22.5 | (31.7) | (14.5) | ||||||||||||||||||||||||||||||||
Asset impairments | (2.3) | (0.3) | (2.1) | (0.2) | (0.2) | 9.5 | ||||||||||||||||||||||||||||||||
| Operating income | 160.2 | 20.3 | 66.4 | 6.8 | 93.8 | 141.3 | ||||||||||||||||||||||||||||||||
| Interest income, net | (77.1) | (9.8) | (79.6) | (8.2) | 2.5 | (3.1) | ||||||||||||||||||||||||||||||||
| Gain on derivative asset, net | (166.3) | (21.0) | — | — | (166.3) | 100.0 | ||||||||||||||||||||||||||||||||
| Loss (gain) on digital assets and related receivables | 75.0 | 9.5 | (28.6) | (2.9) | 103.6 | NM(1) | ||||||||||||||||||||||||||||||||
| Unrealized gain on equity investment | (72.1) | (9.1) | — | — | (72.1) | 100.0 | ||||||||||||||||||||||||||||||||
| Other income, net | (19.5) | (2.5) | — | — | (19.5) | 100.0 | ||||||||||||||||||||||||||||||||
Income before income taxes | 420.2 | 53.2 | 174.6 | 18.0 | 245.6 | 140.7 | ||||||||||||||||||||||||||||||||
| Income tax expense | 121.5 | 15.4 | 6.0 | 0.6 | 115.5 | NM (1) | ||||||||||||||||||||||||||||||||
Net income | $ | 298.7 | 37.8 | % | $ | 168.6 | 17.3 | % | $ | 130.1 | 77.2 | |||||||||||||||||||||||||||
(1) "NM" identifies data that is not meaningful.
| Six Months Ended | ||||||||||||||||||||||||||||||||||||||
| August 1, 2026 | August 2, 2025 | Change | ||||||||||||||||||||||||||||||||||||
| Amount | Percent of Net Sales | Amount | Percent of Net Sales | $ | % | |||||||||||||||||||||||||||||||||
| Net sales | $ | 1,625.5 | 100.0 | % | $ | 1,704.6 | 100.0 | % | $ | (79.1) | (4.6) | % | ||||||||||||||||||||||||||
| Cost of sales | 940.2 | 57.8 | 1,168.7 | 68.6 | (228.5) | (19.6) | ||||||||||||||||||||||||||||||||
| Gross profit | 685.3 | 42.2 | 535.9 | 31.4 | 149.4 | 27.9 | ||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 388.7 | 23.9 | 446.9 | 26.2 | (58.2) | (13.0) | ||||||||||||||||||||||||||||||||
Asset impairments | (6.9) | (0.4) | 33.4 | 2.0 | (40.3) | NM(1) | ||||||||||||||||||||||||||||||||
| Operating income | 303.5 | 18.7 | 55.6 | 3.3 | 247.9 | 445.9 | ||||||||||||||||||||||||||||||||
| Interest income, net | (160.8) | (9.9) | (136.5) | (8.0) | (24.3) | 17.8 | ||||||||||||||||||||||||||||||||
| Gain on derivative asset, net | (434.7) | (26.7) | — | — | (434.7) | 100.0 | ||||||||||||||||||||||||||||||||
| Loss (gain) on digital assets and related receivables | 73.9 | 4.5 | (28.6) | (1.7) | 102.5 | NM(1) | ||||||||||||||||||||||||||||||||
| Unrealized gain on equity investment | (72.1) | (4.4) | — | — | (72.1) | 100.0 | ||||||||||||||||||||||||||||||||
| Other income, net | (29.4) | (1.8) | (2.2) | (0.1) | (27.2) | NM (1) | ||||||||||||||||||||||||||||||||
Income before income taxes | 926.6 | 57.0 | 222.9 | 13.1 | 703.7 | 315.7 | ||||||||||||||||||||||||||||||||
Income tax expense | 238.3 | 14.7 | 9.5 | 0.6 | 228.8 | NM (1) | ||||||||||||||||||||||||||||||||
Net income | $ | 688.3 | 42.3 | % | $ | 213.4 | 12.5 | % | $ | 474.9 | 222.5 | |||||||||||||||||||||||||||
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The Three and Six Months Ended August 1, 2026 Compared to the Three and Six Months Ended August 2, 2025
Net Sales
Beginning in the second quarter of fiscal 2026, we present Net sales in three revised product categories — Collectibles, Pre-Owned and Refurbished, and Video Games — to align with how management evaluates the business. Prior period amounts have been recast to conform to the current presentation. See Note 3, "Revenue."
The following table presents Net sales by significant product category:
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
| August 1, 2026 | August 2, 2025 | August 1, 2026 | August 2, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net Sales | Percent of Net Sales | Net Sales | Percent of Net Sales | Net Sales | Percent of Net Sales | Net Sales | Percent of Net Sales | |||||||||||||||||||||||||||||||||||||||||||
| Collectibles | $ | 356.3 | 45.1 | % | $ | 227.6 | 23.4 | % | $ | 705.2 | 43.4 | % | $ | 439.1 | 25.7 | % | ||||||||||||||||||||||||||||||||||
| Video Games | 263.2 | 33.3 | 494.6 | 50.9 | 549.8 | 33.8 | 844.8 | 49.6 | ||||||||||||||||||||||||||||||||||||||||||
| Pre-Owned and Refurbished | 170.7 | 21.6 | 250.0 | 25.7 | 370.5 | 22.8 | 420.7 | 24.7 | ||||||||||||||||||||||||||||||||||||||||||
| Total net sales | $ | 790.2 | 100.0 | % | $ | 972.2 | 100.0 | % | $ | 1,625.5 | 100.0 | % | $ | 1,704.6 | 100.0 | % | ||||||||||||||||||||||||||||||||||
The following table presents Net sales by reportable segment:
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
| August 1, 2026 | August 2, 2025 | August 1, 2026 | August 2, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net Sales | Percent of Net Sales | Net Sales | Percent of Net Sales | Net Sales | Percent of Net Sales | Net Sales | Percent of Net Sales | |||||||||||||||||||||||||||||||||||||||||||
| United States | $ | 608.2 | 77.0 | % | $ | 724.6 | 74.5 | % | $ | 1,259.3 | 77.4 | % | $ | 1,262.1 | 74.1 | % | ||||||||||||||||||||||||||||||||||
| Canada | — | — | — | — | — | — | 38.2 | 2.2 | ||||||||||||||||||||||||||||||||||||||||||
| Australia | 120.9 | 15.3 | 140.9 | 14.5 | 220.5 | 13.6 | 222.8 | 13.1 | ||||||||||||||||||||||||||||||||||||||||||
| Europe | 61.1 | 7.7 | 106.7 | 11.0 | 145.7 | 9.0 | 181.5 | 10.6 | ||||||||||||||||||||||||||||||||||||||||||
| Total net sales | $ | 790.2 | 100.0 | % | $ | 972.2 | 100.0 | % | $ | 1,625.5 | 100.0 | % | $ | 1,704.6 | 100.0 | % | ||||||||||||||||||||||||||||||||||
Net sales decreased $182.0 million, or 18.7% for the three months ended August 1, 2026, compared to the prior year period.
During the three months ended August 1, 2026, Net sales decreased 14.2% in Australia, 16.1% in the United States, and 42.7% in Europe. The overall decrease in consolidated Net sales for the three months ended August 1, 2026 compared to the prior year period was primarily driven by a decline in Video Games sales of $231.4 million, or 46.8%, and a decline in Pre-Owned and Refurbished sales of $79.3 million or 31.7%. This was partially offset by an increase in Collectibles sales of $128.7 million or 56.5%. The declines in Video Games and in Pre-Owned and Refurbished sales were primarily due to the prior-year launch of the Nintendo Switch 2, with no such launch in the current year period; the prior year period included launch-driven hardware sales and elevated trade-in activity and pre-owned sales associated with the launch. The increase in Collectibles sales was primarily driven by continued growth in trading cards.
Net sales decreased $79.1 million, or 4.6% for the six months ended August 1, 2026, compared to the prior year period.
During the six months ended August 1, 2026, Net sales decreased 19.7% in Europe, 1.0% in Australia, 0.2% in the United States and 100.0% in Canada. The decline in the Canada segment reflects the divestiture of that business in the second quarter of fiscal 2025. The overall decrease in consolidated Net sales for the six months ended August 1, 2026 compared to the prior year period was primarily driven by a decrease in Video Games sales of $295.0 million or 34.9%, and a decrease in Pre-Owned and Refurbished sales of $50.2 million or 11.9%. This was partially offset by an increase in collectible sales of $266.1 million or 60.6%. The decline in Video Game sales was primarily due to the prior-year launch of the Nintendo Switch 2, with no such launch in the current year period.
Gross Profit
Gross profit increased $61.9 million, or 21.9% during the three months ended August 1, 2026, compared to the prior year period. Gross profit as a percentage of Net sales increased to 43.7%, from 29.1% in the prior year period. The increase in Gross profit and gross margin was primarily driven by a shift in sales mix towards our higher-margin product categories: sales of Collectibles increased to 45.1% of total Net sales for the three months ended August 1, 2026, compared to 23.4% in the prior year period, while sales of Video Games - which carry the lowest gross margin of our product categories, particularly new hardware - decreased to 33.3% of Net sales, compared to 50.9% in the prior year period, which included the launch of the Nintendo Switch 2.
Gross profit increased $149.4 million, or 27.9% during the six months ended August 1, 2026, compared to the prior year period.
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Gross profit as a percentage of Net sales increased to 42.2%, from 31.4% in the prior year period. The increase in Gross profit and gross margin was primarily driven by a shift in sales mix towards our higher-margin product categories: sales of Collectibles increased to 43.4% of Net sales for the six months ended August 1, 2026, compared to 25.8% in the prior year period, while sales of Video Games decreased to 33.8% of Net sales, compared to 49.6% in the prior year period.
Selling, General and Administrative Expenses
During the three months ended August 1, 2026, Selling, general, and administrative ("SG&A") expenses decreased $31.7 million, or 14.5%, compared to the prior year period. SG&A as a percentage of Net sales increased to 23.7% in the current year period compared to 22.5% in the prior year period.
The reduction in SG&A for the three months ended August 1, 2026 was primarily driven by an $18.5 million decrease in store-related rent and occupancy costs due to store closures and international divestitures completed in such period. In addition, labor-related costs, consulting services and marketing expenses decreased $11.4 million as part of our ongoing cost-optimization initiatives during the three months ended August 1, 2026.
During the six months ended August 1, 2026, SG&A expenses decreased $58.2 million, or 13.0%, compared to the prior year period. SG&A as a percentage of Net sales decreased to 23.9% in the current year period compared to 26.2% in the prior year period.
The reduction in SG&A expenses for the six months ended August 1, 2026 was primarily driven by a $38.4 million decrease in store-related rent and occupancy costs, due to store closures and international divestitures completed in recent periods. In addition, labor-related costs, consulting services and marketing expenses decreased $20.8 million as part of our ongoing cost-optimization initiatives.
Asset Impairments
During the three months ended August 1, 2026, Asset impairment was a benefit of $2.3 million, compared to a benefit of $2.1 million in the prior year period. As a percentage of Net sales, the net impairment benefit was 0.3% during the current year period, compared to 0.2% in the prior year period. The change was attributable to management's plan, approved in the first quarter of fiscal 2025, to divest the Company's operations in France, resulting in the reclassification of the related assets and liabilities as held for sale. The divestiture was completed during the second quarter of fiscal 2026.
During the six months ended August 1, 2026, Asset impairment was a benefit of $6.9 million, compared to an expense of $33.4 million in the prior year period. As a percentage of Net sales, the net impairment benefit was 0.4% during the current year period, compared to expense of 2.0% in the prior year period. The change was primarily attributable to management's plan, approved in the first quarter of fiscal 2025, to divest the Company's operations in Canada and France, resulting in the reclassification of the related assets and liabilities as held for sale. We recorded $18.3 million of Impairment expense related to the Canadian disposal group in the first half of fiscal 2025, and the divestiture was completed during the second quarter of fiscal 2025. We recorded $15.1 million of impairment expense related to the French disposal group in the first half of fiscal 2025, and the divestiture was completed during the second quarter of fiscal 2026.
Interest Income, net
Interest income, net decreased $2.5 million to $77.1 million for the three months ended August 1, 2026, compared to $79.6 million in the prior year period. The decrease was primarily driven by lower average Cash and cash equivalent and Marketable securities balances resulting from the investment in the eBay Common Stock during fiscal 2026.
Interest income, net increased $24.3 million to $160.8 million for the six months ended August 1, 2026, compared to $136.5 million in the prior year period. The increase was primarily driven by higher average Cash and cash equivalent, and Marketable securities balances resulting from the issuance of the Convertible Notes.
Gain on Derivative Asset, net
During the three and six months ended August 1, 2026, we recognized Gain on derivative asset, net of $166.3 million and $434.7 million, respectively. There were no comparable amounts in the prior year periods.
The increase in the Gain on derivative asset, net for the three and six months ended August 1, 2026 was due to the Company entering into the Put/Call Pairs during the first half of fiscal 2026 that provided economic exposure to the eBay Common Stock.
Loss (Gain) on Digital Assets and Related Receivables
For the three months ended August 1, 2026, the Loss on digital assets and related receivables was $75.0 million compared to a Gain on digital assets of $28.6 million in the prior year period.
For the six months ended August 1, 2026, the Loss on digital assets and related receivables was $73.9 million, compared to a Gain on digital assets of $28.6 million in the prior year period.
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Unrealized Gain on Equity Investment
During the three and six months ended August 1, 2026, we recognized an Unrealized gain on equity investment of $72.1 million, with no comparable amounts in the prior year periods. The increase in the Unrealized gain on equity investment was due to the Company's investment in eBay Common Stock.
Income Tax Expense
We recognized Income tax expense of $121.5 million for the three months ended August 1, 2026, compared to an Income tax expense of $6.0 million for the three months ended August 2, 2025. Our effective income tax rate was 28.9% for the three months ended August 1, 2026 compared to 3.4% for the three months ended August 2, 2025.
We recognized Income tax expense of $121.5 million for the three months ended August 1, 2026, compared to an Income tax expense of $6.0 million for the three months ended August 2, 2025. Our effective income tax rate was 28.9% for the three months ended August 1, 2026 compared to 3.4% for the three months ended August 2, 2025.
We recognized Income tax expense of $238.3 million for the six months ended August 1, 2026, compared to an Income tax expense of $9.5 million for the six months ended August 2, 2025. Our effective income tax rate was 25.7% for the six months ended August 1, 2026 compared to 4.3% for the six months ended August 2, 2025.
The increase in income tax expense was driven primarily by significantly higher pre-tax income for the three and six months ended August 1, 2026, compared to the three and six months ended August 2, 2025. The increase in the effective tax rate reflects that the prior-year period benefited from the utilization of U.S. net operating loss carryforwards and the related release of valuation allowances, which were substantially exhausted by the end of fiscal 2025. The difference between our effective tax rates and the statutory income tax rates in the current periods is primarily attributable to state income taxes and losses for which no corresponding tax benefit was recognized.
See Note 12, "Income Taxes," for additional information.
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LIQUIDITY AND CAPITAL RESOURCES
Cash, cash equivalents and marketable securities
| August 1, 2026 | August 2, 2025 | January 31, 2026 | ||||||||||||||||||
| Cash and cash equivalents | $ | 4,854.3 | $ | 8,694.4 | $ | 6,304.7 | ||||||||||||||
| Marketable securities | 206.0 | — | 2,709.1 | |||||||||||||||||
| Cash, cash equivalents and marketable securities | $ | 5,060.3 | $ | 8,694.4 | $ | 9,013.8 | ||||||||||||||
Sources of Liquidity; Uses of Capital
Our principal sources of liquidity are cash on hand and cash from operations. As of August 1, 2026, we had $4,854.3 million of unrestricted Cash and cash equivalents, and $206.0 million of Marketable securities.
Our Cash and cash equivalents are carried at cost, which approximates fair value, and consist primarily of cash, money market funds, cash deposits with commercial banks, and highly rated direct short-term instruments with original maturities of 90 days or less.
Our Marketable securities are carried at fair value and include investments in certain highly-rated short-term government notes, government bills, commercial paper, and time deposits. As of August 1, 2026, $206.0 million of these investments had original maturities in excess of 90 days and less than one year and are classified as "Marketable securities" on our condensed consolidated balance sheets.
In fiscal 2025, we reclassified Cash and Marketable securities associated with the French disposal group to Assets held for sale on the condensed consolidated balance sheets. As of August 1, 2026, the divestiture of the French disposal group was completed. See Note 9, "Assets Held for Sale," for additional information.
On an ongoing basis, we evaluate and consider certain strategic operating alternatives, including divestitures, restructuring or dissolution of unprofitable business segments, uses for our excess cash, as well as equity and debt financing alternatives that we believe may enhance stockholder value. The nature, amount and timing of any strategic operational change, or financing transactions that we might pursue will depend on a variety of factors, including, as of the applicable time, our available cash and liquidity and operating performance; our commitments and obligations; our capital requirements; limitations imposed under our credit arrangements; and overall market conditions.
Gains and losses on marketable securities may fluctuate significantly from period to period in the future and could have a significant impact on the Company’s results of operations. However, the amount of gain or loss on marketable securities for any given period may have no predictive value and variations in amount from period to period may have no analytical value.
Some of our vendors have requested and may continue to request credit support collateral for our inventory purchase obligations and the levels of such collateral will depend on a variety of factors, including our inventory purchase levels, available payment terms for inventories, favorable credit terms, and costs of providing collateral.
We maintain uncommitted facilities with certain lenders that provide for the issuance of letters of credit and bank guarantees, at times supported by cash collateral. As of August 1, 2026, we had letters of credit and other bank guarantees outstanding in the amount of $4.6 million.
Bitcoin
In the first quarter of fiscal 2025, we announced that the Board approved the addition of Bitcoin as a treasury reserve asset, allowing a portion of our cash or future debt and equity proceeds to be invested in Bitcoin. During the second quarter of fiscal 2025, we purchased 4,710 Bitcoin for $500 million. In the fourth quarter of fiscal 2025, we entered into an agreement (the "Collateral Agreement") with Coinbase Credit, Inc. ("Coinbase"), under which we sold covered call options on a portion of the Bitcoin we own. In connection with this covered-call strategy, we pledged 4,709 Bitcoin (the "Pledged Bitcoin") as collateral.
Under the terms of the Collateral Agreement, Coinbase retained the right to rehypothecate, commingle, or unilaterally sell the Pledged Bitcoin. As a result of these rights, we concluded that control of the Pledged Bitcoin transferred to Coinbase. Accordingly, during the fourth quarter of fiscal 2025, we derecognized the Pledged Bitcoin as an Intangible asset and recognized Digital assets receivable within Digital assets and related receivables on our condensed consolidated balance sheets representing our contractual right to receive equivalent amount of Bitcoin in the future. The Digital assets receivable is presented within Digital assets and related receivables on the condensed consolidated balance sheets as of both August 1, 2026 and January 31, 2026, and remains subject to the Collateral Agreement. Although the classification of these assets has changed, our economic exposure is consistent with direct ownership of the underlying Bitcoin, except to the extent of the covered call options written on a portion of those holdings.
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We recorded a loss of $75.0 million and $73.9 million related to the Digital asset receivable during the three and six months ended August 1, 2026, respectively, reflecting the decrease in the market price of Bitcoin during the periods.
At-the-Market Equity Offering Program
On May 17, 2024, we entered into an Open Market Sale AgreementSM (the “Sales Agreement”) with Jefferies LLC (the “Sales Agent”) providing for the sale by the Company of shares of our Class A common stock, from time to time, through the Sales Agent in connection with an “at-the-market offering” program (the “ATM Offering”). No shares of Common Stock were sold under the ATM Offering during the six months ended August 1, 2026.
Convertible Senior Notes
On April 1, 2025, we completed a private offering of $1,500 million aggregate principal amount of the Convertible 2030 Notes, including the exercise in full of the initial purchaser's option to purchase up to an additional $200 million aggregate principal amount of the 2030 Notes. The 2030 Notes are general unsecured obligations of the Company. The 2030 Notes were issued pursuant to an Indenture, dated April 1, 2025, between the Company and U.S. Bank Trust Company, National Association (the "Trustee"), as trustee.
On June 17, 2025, we completed a private offering of $2,250 million aggregate principal of the 2032 Notes, plus the exercise of the option by the initial purchaser of the 2032 Notes to purchase up to an additional $450 million aggregate principal amount of 2032 Notes. The 2032 Notes are general unsecured obligations of the Company. The 2032 Notes were issued pursuant to an Indenture, dated June 17, 2025, between the Company and the Trustee, as trustee.
See Note 5 “Debt” and Note 15 "Subsequent Events" for additional information related to the Convertible Notes.
Warrants
On October 7, 2025, the Company, announced that the Board declared a distribution (the “Warrant Distribution”) to the holders of record of the Common Stock and holders of the Convertible Notes, in the form of warrants to purchase shares of Common Stock (the “Warrants”). The Warrants were issued on the terms and conditions described in the Warrant Agreement (as defined below) and were distributed on October 7, 2025, to the record holders of the Common Stock and the Convertible Notes as of the close of business on October 3, 2025 (the “Record Date”).
Pursuant to the terms of the Warrant Agreement between the Company, Computershare Inc., a Delaware corporation, and its affiliate, Computershare Trust Company, N.A., as Warrant Agent (the “Warrant Agreement”), each holder of record of Common Stock as of the Record Date received one Warrant for every ten shares of Common Stock (rounded down to the nearest whole number for any fractional Warrant). Holders of the Convertible Notes also received Warrants on an “as converted” basis in lieu of an adjustment to the conversion rate of the Convertible Notes pursuant to the applicable indenture governing the Convertible Notes. The distribution of the Warrants to the Convertible Noteholders was at the same time and on the same terms as holders of Common Stock. Holders of the Convertible Notes were not required to convert the Convertible Notes into Common Stock in order to receive the Warrants.
Each Warrant entitles the holder to purchase, at the holder’s sole and exclusive election, at a cash exercise price of $32.00 per Warrant (the “Exercise Price”), one share of Common Stock, subject to adjustment pursuant to the provisions of the Warrant Agreement. Payment for shares of Common Stock upon exercise of Warrants must be in cash. The Warrants will expire and cease to be exercisable at 5:00 p.m. New York City time on October 30, 2026 (the “Expiration Date”).
The number of shares of Common Stock issuable upon exercise of the Warrants is subject to certain anti-dilution adjustments, including for stock dividends, share splits, share combinations, rights issuances, other distributions, spinoffs, cash dividends and tender or exchange offers.
The Warrants commenced trading on the New York Stock Exchange under the ticker “GME WS” on October 8, 2025.
In connection with the Warrant Distribution, the Company filed a prospectus supplement, dated October 7, 2025, pursuant to the Company’s existing shelf registration statement on Form S-3 ASR, effective as of October 3, 2025, registering up to 59,153,963 shares of Common Stock to be issued upon exercise of the Warrants.
During the six months ended August 1, 2026, holders exercised 2,534 Warrants, resulting in the issuance of 2,534 shares of common stock and cash proceeds of $0.1 million.
Share Authorization
On July 7, 2026, GameStop shareholders approved an amendment to the Company’s certificate of incorporation, increasing the number of authorized shares of Class A common stock from 1.0 billion to 2.5 billion.
Share Repurchase Authorization
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During the second quarter of fiscal 2026, the Board approved a new discretionary $2.0 billion share repurchase authorization to replace the previous share repurchase authorization. Under the new share repurchase authorization, the Company may repurchase shares of its Class A common stock from time to time in compliance with SEC regulations and other legal requirements, and subject to market conditions and other factors. The repurchase authorization does not require the Company to acquire any specific number of shares and may be terminated at any time.
Cash Flows
| Six Months Ended | ||||||||||||||||||||
| August 1, 2026 | August 2, 2025 | Change | ||||||||||||||||||
| Cash provided by operating activities | $ | 399.8 | $ | 309.9 | $ | 89.9 | ||||||||||||||
| Cash used in investing activities | (1,865.1) | (516.0) | (1,349.1) | |||||||||||||||||
Cash provided by financing activities | 0.1 | 4,153.3 | (4,153.2) | |||||||||||||||||
| Exchange rate effect on cash, cash equivalents and restricted cash | 5.4 | 6.0 | (0.6) | |||||||||||||||||
Net change in cash balance classified as assets held for sale | — | (9.1) | 9.1 | |||||||||||||||||
| (Decrease) Increase in cash, cash equivalents and restricted cash | $ | (1,459.8) | $ | 3,944.1 | $ | (5,403.9) | ||||||||||||||
Operating Activities
Cash provided by operating activities was $399.8 million during the six months ended August 1, 2026, compared to $309.9 million during the six months ended August 2, 2025. The increase was primarily driven by higher operating income and increased interest income during the current year period.
Investing Activities
Cash used in investing activities was $1,865.1 million during the six months ended August 1, 2026 compared to cash used in investing activities of $516.0 million during the six months ended August 2, 2025.
Cash used in investing activities during the six months ended August 1, 2026 was primarily driven by the equity investment in eBay, partially offset by proceeds from the sales and maturities of marketable securities.
Cash used in investing activities during the six months ended August 1, 2026 was primarily driven by the equity investment in eBay, partially offset by proceeds from the sales and maturities of marketable securities.
Cash used in investing activities during the six months ended August 2, 2025 was primarily due to the purchase of digital assets in the second quarter of fiscal 2025.
Financing Activities
Cash provided by financing activities was $0.1 million during the six months ended August 1, 2026, compared to $4,153.3 million during the six months ended August 2, 2025. The decrease was primarily due to $4.2 billion of gross proceeds received from the issuance of the Convertible Notes in the prior-year period, with no comparable financing activity in the current-year period.
CRITICAL ACCOUNTING ESTIMATES
CRITICAL ACCOUNTING ESTIMATES
Valuation of Derivative Asset
During the first half of fiscal 2026, the Company recognized a Derivative asset that provided economic exposure to 39,046,658 shares of eBay Common Stock. This exposure resulted from a series of paired put and call option transactions (the “Put/Call Pairs”) entered into during the first half of fiscal 2026. Each Put/Call Pair was structured as a combination of non-transferable embedded purchased call option and non-transferable embedded written put option entered into contemporaneously with the same counterparty.
The Company considers the valuation of the derivative asset to be a critical accounting estimate due to the significant judgment involved and its material impact on the Company’s financial position and results of operations. The fair value of these options is determined in accordance with ASC 820 using widely accepted option-pricing models that incorporate observable market inputs, including the underlying stock price, implied volatility, and time to expiration. Accordingly, the options are classified as Level 2 within the fair value hierarchy.
These valuation techniques incorporate the contractual terms of the instruments, including the embedded rights and obligations, as well as relevant market conditions and observable inputs as of each reporting date. Key inputs used in the valuation include the strike price, the market price of eBay Common Stock, the number of contracts, and the resulting intrinsic value per share.
All Put/Call Pairs were exercised and settled during the second quarter of fiscal 2026, and no Derivative asset remained on the Company's condensed consolidated balance sheets as of August 1, 2026. During the three and six months ended August 1,
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2026, the Company recognized a Gain on derivative asset, net of $166.3 million and $434.7 million, respectively. net of certain transaction-related costs,in its condensed consolidated statements of operations.
Our condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information and exclude certain disclosures required under GAAP for complete consolidated financial statements. Preparation of these statements requires us to make judgments and estimates. Some accounting policies have a significant impact on amounts reported in these condensed consolidated financial statements. For a summary of significant accounting policies and the means by which we develop estimates thereon, see “Part II—Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Annual Report on Form 10-K. There have been no material changes to our critical accounting policies from those included in our 2025 Annual Report on Form 10-K, other than the valuation of Derivative asset described above.
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OFF-BALANCE SHEET ARRANGEMENTS
We had no material off-balance sheet arrangements as of August 1, 2026 other than those disclosed in Part I, Item 1 "Notes to the Condensed Consolidated Financial Statements," Note 5 "Debt" and Note 6 "Commitments and Contingencies" of our condensed consolidated financial statements for additional information.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes to our quantitative and qualitative disclosures about market risk as set forth in Part II, Item 7A "Quantitative and Qualitative Disclosures About Market Risks" in our 2025 Annual Report on Form 10-K.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")) are designed to provide reasonable assurance that required disclosures in the reports that we file or submit under the Exchange Act have been appropriately recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and are effective in ensuring that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Our principal executive officer and principal financial officer, with assistance from other members of management, have reviewed the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report and, based on that evaluation, determined that our disclosure controls and procedures were effective as of August 1, 2026 at the reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the second quarter of fiscal 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The matters described in Part I, Item 1 "Notes to Condensed Consolidated Financial Statements," Note 6 "Commitments and Contingencies - Legal Proceedings" in this Quarterly Report on Form 10-Q are incorporated by reference.
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors disclosed in the section entitled "Risk Factors" in Part I, Item 1A in our 2025 Annual Report on Form 10-K, and the other reports that we have filed with the SEC. Any of the risks discussed in such reports, as well as additional risks and uncertainties not currently known to us or that we currently deem immaterial, could materially and adversely affect our results of operations, financial condition or prospects. During the period covered by this Quarterly Report on Form 10-Q, there have been no material changes in our risk factors as previously disclosed.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the second quarter of fiscal 2026, the Board approved a new discretionary $2.0 billion share repurchase authorization, replacing the previous authorization. The new share authorization expires on June 2, 2029. No shares of our Class A common stock were repurchased during the three months ended August 1, 2026, and the full $2.0 billion remained available under the authorization as of August 1, 2026.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Security Trading Plans of Directors and Executive Officers
None of the Company's directors or executive officers of the Company adopted ,terminated
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ITEM 6. EXHIBITS
| Exhibit Number | Description | Previously Filed as an Exhibit to and Incorporated by Reference From | Date Filed | |||||||||||||||||
| 3.1 | Third Amended and Restated Certificate of Incorporation. | Quarterly Report on Form 10-Q for the fiscal quarter ended August 3, 2013 | September 11, 2013 | |||||||||||||||||
| 3.2 | Certificate of Amendment of the Third Amended and Restated Certificate of Incorporation. | Current Report on Form 8-K | June 3, 2022 | |||||||||||||||||
| 3.3 | Fifth Amended and Restated Bylaws. | Current Report on Form 8-K | March 6, 2017 | |||||||||||||||||
| 4.1 | Warrant Agreement (including Form of Warrant), dated October 7, 2025, by and between GameStop Corp., Computershare Inc., and Computershare Trust Company, N.A., as Warrant Agent. | Current Report on Form 8-K | October 7, 2025 | |||||||||||||||||
| 10.1 | Form of Exchange Agreement for 2030 Notes. | Filed herewith. | ||||||||||||||||||
| 10.2 | Form of Exchange Agreement for 2032 Notes. | Filed herewith. | ||||||||||||||||||
| 10.3 | Form of Amendment to Exchange Agreement for 2030 Notes. | Filed herewith. | ||||||||||||||||||
| 10.4 | Form of Amendment to Exchange Agreement for 2032 Notes. | Filed herewith. | ||||||||||||||||||
| 31.1 | Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | Filed herewith. | ||||||||||||||||||
| 31.2 | Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | Filed herewith. | ||||||||||||||||||
| 32.1 | Certification of Principal Executive Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | Furnished herewith. | ||||||||||||||||||
| 32.2 | Certification of Principal Financial Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | Furnished herewith. | ||||||||||||||||||
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document. | Submitted electronically herewith. | ||||||||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema | Submitted electronically herewith. | ||||||||||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase | Submitted electronically herewith. | ||||||||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase | Submitted electronically herewith. | ||||||||||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase | Submitted electronically herewith. | ||||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). | Submitted electronically herewith. | ||||||||||||||||||
† Certain schedules and other similar attachments to this exhibit have been omitted from this filing pursuant to Item 601(a)(5) of Regulation S-K. The Company will provide a copy of such omitted documents to the Securities and Exchange Commission upon request. | ||||||||||||||||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| GAMESTOP CORP. | |||||||||||
Date: September 9, 2026 | By: | /s/ Daniel Moore | |||||||||
| Daniel Moore | |||||||||||
| Principal Financial and Accounting Officer | |||||||||||