Interactive GameStop balance sheet for Q1 FY2026 — click any row to learn what each line means
Every balance sheet satisfies one equation. Click any row to understand it.
2026 May 3
2025 Jan 31
2026
Filing Highlights · from the Q1 FY2026 10-Q · fiscal period ended May 2, 2026
Income Statement
The income statement covers the three months ended May 2, 2026 vs. the same period a year prior. Unlike the balance sheet (a snapshot), this is a flow statement — it shows what happened over the quarter.
Revenue from physical and digital sales across Hardware & Accessories, Software, and Collectibles. The 14% year-over-year increase signals stabilising retail performance despite store count reductions.
Gross margin improved to ~40.7% from ~34.5% — a significant jump. This partly reflects a product-mix shift toward higher-margin collectibles and reduced discounting.
Net income surged largely due to a $268.4M unrealized gain on the eBay derivative (Put/Call Pairs providing ~5% economic exposure to eBay shares) — a non-cash mark-to-market item that inflates reported earnings this quarter but may reverse if eBay's share price falls. A smaller $1.1M gain on Bitcoin-related digital assets also contributed.
Diluted EPS ($0.66) is notably lower than basic EPS ($0.87) because diluted share count includes 144M+ additional potential shares from convertible notes and warrants — a significant dilution risk investors should monitor.
Selling, General & Administrative costs fell 11.6% year-over-year, reflecting ongoing cost discipline — fewer stores, leaner headcount. This is a key driver of the improved operating income ($143.3M vs. a −$10.8M loss a year ago).
Cash Flow Statement
Cash flow tells you where real money moved — independent of accounting gains. A company can post huge net income but still burn cash (or vice versa). All three sections below sum to the period's total cash change.
Strong core cash generation. The $285.3M unrealized eBay derivative gain is stripped out as a non-cash item in this section — confirming the business generated real operating cash on its own.
Dominated by $1.73B in proceeds from maturing/sold marketable securities, offset by $983.3M in collateral pledged for the eBay derivative. The company is actively deploying cash from its treasury into derivatives and digital asset strategies.
Essentially flat — no major capital raises or debt repayments this quarter. The company issued $1.5B in convertible notes in Q1 FY2025, so the comparator period looks much larger ($1,478M).
GME is sitting on an exceptional cash pile for a retailer of its size. This includes restricted cash. Management's stated strategy is to allocate excess capital toward Bitcoin and other investments rather than paying dividends or buying back stock.
Notable Notes to the Filing
The footnotes to a 10-Q often contain the most important information — transactions, risks, and obligations that don't appear in the headline numbers.
GME's $369.6M digital asset balance is primarily a receivable for 4,709 Bitcoin pledged as collateral (Level 2 fair value), plus 1 Bitcoin held directly (Level 1). The company did not buy or sell Bitcoin during Q1 FY2026. GME also collected $5.8M in premiums from written options on digital assets. The Bitcoin-related gain of $1.1M is a small item on the income statement — the large $268.4M unrealized gain reported this quarter comes from the separate eBay derivative position, not Bitcoin.
The largest single driver of Q1 FY2026 earnings. GME entered Put/Call Pairs on 22,176,000 eBay shares and held 25,000 eBay shares directly, representing approximately a 5% economic interest in eBay. The derivative was carried at $285.3M (Level 2 fair value) after a $268.4M unrealized gain. To support the position, GME posted $983.3M in cash collateral — this cash sits in an account in GME's name but controlled by the counterparty, limiting available liquidity while the position is open. If eBay's share price declines significantly, this gain could reverse.
GME carries two convertible senior note series: one due 2030 (issued April 2025) and one due 2032 (issued June 2025), totalling ~$4.16B. These convert into shares at defined prices — if triggered, they could significantly dilute existing shareholders. The diluted share count already jumps from 448M (basic) to 592M (diluted) to account for this. Additionally, there are outstanding warrants (ticker: GME WS on NYSE) that add further dilution potential. The French unsecured term loans (a legacy from European operations) remain as minor line items.
After the quarter ended, GME entered a strategic agreement with eBay — disclosed as a subsequent event (meaning it happened after May 2 but before the filing date). GameStop's stores began listing pre-owned games & collectibles on eBay's marketplace. This is a notable pivot: using eBay's platform extends GME's online reach without building its own e-commerce infrastructure. The filing references multiple milestone dates (May 4, May 19, May 28, June 5) suggesting a phased rollout through early June 2026.
GME has been winding down its Canadian and French operations — both classified as discontinued operations held for sale. Canada was fully exited during FY2025. The French segment remains partially active with $152.4M in assets and $143.0M in liabilities still on the books. Active segments as of Q1 FY2026 are: United States, Australia, and Europe (ex-France). The loss of Canada removed a revenue segment from year-over-year comparisons, making the US/Australia/Europe results the core business going forward.
GameStop Corp 10-Q · fiscal Q1 2026 · amounts in millions USD