Tue, Jun 10, 8:06 PM (11 days ago)
**GameStop Corp. (GME) Q1 2025 Financial Summary** **Financial Health & Performance:** - **Revenue:** $732.4 million, down 16.9% YoY due to declines in hardware, accessories, and software sales, partially offset by a 54.6% increase in collectibles. - **Gross Profit:** $252.8 million, up 3.4% YoY, with a margin of 34.5%, driven by higher-margin product categories. - **Operating Loss:** $10.8 million, improved from a $50.6 million loss YoY, despite a $35.5 million asset impairment. - **Net Income:** $44.8 million, a significant improvement from a $32.3 million loss YoY. - **EPS:** Basic $0.10, diluted $0.09, compared to a basic loss of $0.11 YoY. - **Cash Flow:** Positive operating cash flow of $192.5 million, driven by net income and changes in working capital. **Profit Margins:** - Gross margin improved to 34.5% from 27.7% YoY. - Operating margin improved to -1.5% from -5.7% YoY. **Cash Flow & Earnings Changes:** - **Operating Cash Flow:** Positive $192.5 million, a $302.3 million improvement YoY. - **Investing Cash Flow:** Positive $7.3 million, down $182.5 million YoY due to lower proceeds from maturities and sales of marketable securities. - **Financing Cash Flow:** Positive $1,478.0 million, up $1,480.7 million YoY due to the issuance of Convertible Notes. **Quarterly Performance & Trends:** - **Sales Trends:** Decline in hardware, accessories, and software sales, offset by growth in collectibles. - **Cost Management:** SG&A expenses decreased by 22.7% YoY, driven by cost reduction efforts. - **Asset Impairments:** $35.5 million impairment due to divestiture plans for Canadian and French operations. **Uncertainties & Future Operations:** - **Divestitures:** Plans to sell Canadian and French operations, with expected closures in fiscal 2025. - **Investment Policy:** Board authorized a revised investment policy, including Bitcoin as a treasury reserve asset. - **Debt:** Issued $1.5 billion in Convertible Senior Notes, with potential repurchase obligations in 2028. **Segment Performance:** - **United States:** Net sales down 12.9% YoY, operating income of $33.6 million. - **Canada:** Net sales down 10.3% YoY, operating loss of $22.2 million. - **Australia:** Net sales up 2.9% YoY, operating loss of $5.4 million. - **Europe:** Net sales down 47.4% YoY, operating loss of $16.8 million. **Conclusion:** GameStop's Q1 2025 shows improved profitability and cash flow, driven by cost management and a shift to higher-margin products. However, the company faces uncertainties related to divestitures and significant debt obligations. The revised investment policy, including Bitcoin, adds further complexity to the company's financial strategy.