GameStop (GME) Q2 2025 earnings summary

Executive summary

• Net sales rose 21.8% year-over-year to $972.2M for the quarter, driven by hardware/accessories and collectibles, while software sales declined.

• Net income surged to $168.6M from $14.8M a year ago, with EPS of $0.38 (basic) versus $0.04.

• Significant cost reductions in SG&A expenses contributed to improved profitability.

• Completed divestiture of Canadian operations and announced plan to divest France; both reclassified as held for sale.

• Bitcoin holdings were valued at $528.6M at quarter-end, with $500M invested as part of a revised investment policy.

Financial highlights

• Gross profit increased 13.8% to $283.1M; gross margin declined to 29.1% from 31.2% due to product mix.

• SG&A expenses fell 19.2% to $218.8M, now 22.5% of sales versus 33.9% last year.

• Operating income was $66.4M, reversing a $22M loss last year.

• Adjusted EBITDA for the quarter was $75.7M, up from $33.4M last year.

• Free cash flow for the quarter was $113.3M, up from $65.5M last year.

Outlook and guidance

• Ongoing cost containment and store optimization expected to further reduce SG&A expenses.

• Anticipates closing additional stores in fiscal 2025 as part of portfolio optimization.

• No material impact expected from recent U.S. tax law changes on fiscal 2025 effective tax rate.

• Forward-looking statements highlight risks from industry cyclicality, supply chain, consumer trends, and technology changes.

• Earnings may be volatile due to investment holdings, including Bitcoin.