GameStop (GME) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 2025 were $732.4 million, down 16.9% year-over-year, with net income of $44.8 million compared to a net loss of $32.3 million in Q1 2024.

• Gross profit increased to $252.8 million, with gross margin rising to 34.5% from 27.7% due to a shift to higher-margin product categories.

• SG&A expenses decreased 22.7% year-over-year, reflecting cost containment and store closures.

• Asset impairments of $35.5 million were recognized due to planned divestitures in Canada and France.

• Cash and cash equivalents rose to $6.4 billion, driven by equity offerings and a $1.5 billion convertible note issuance.

Financial highlights

• Net sales declined $149.4 million year-over-year, mainly from lower hardware and software sales, partially offset by a 54.6% increase in collectibles.

• Net income was $44.8 million (EPS: $0.10 basic, $0.09 diluted), reversing a prior year loss.

• Operating loss narrowed to $10.8 million from $50.6 million year-over-year, with $35.5 million in impairment charges.

• Free cash flow was $189.6 million, compared to negative $114.7 million last year.

• Adjusted EBITDA was $38.6 million, up from negative $37.6 million year-over-year.

Outlook and guidance

• Management continues to focus on cost containment, store portfolio optimization, and expanding higher-margin categories.

• Additional store closures are anticipated in fiscal 2025 as part of ongoing optimization.

• No specific revenue or earnings guidance provided for the remainder of fiscal 2025.