GameStop(GME)2025-06-10 20:03Financial Performance - Net sales for Q1 2025 were $732.4 million, a decrease of 17% from $881.8 million in Q1 2024[6] - Operating loss improved to $10.8 million from a loss of $50.6 million in the prior year, with adjusted operating income at $27.5 million compared to an adjusted operating loss of $55.0 million[6] - Net income for the quarter was $44.8 million, a turnaround from a net loss of $32.3 million in Q1 2024[6] - Adjusted net income for Q1 2025 was $83.1 million, compared to an adjusted net loss of $36.7 million in Q1 2024[22] - Free cash flow for the 13 weeks ended May 3, 2025, was $189.6 million, a recovery from a negative free cash flow of $114.7 million in the prior year[30] Expenses and Liabilities - SG&A expenses decreased to $228.1 million from $295.1 million year-over-year, representing a reduction of approximately 23%[6] - Total current liabilities remained stable at $847.3 million in Q1 2025, slightly down from $848.3 million in Q1 2024[15] Assets and Equity - Cash, cash equivalents, and marketable securities increased significantly to $6.4 billion from $1.0 billion year-over-year[6] - Total assets increased to $7,502.6 million in Q1 2025 from $2,587.1 million in Q1 2024, representing a growth of 189.5%[15] - Total stockholders' equity increased to $4,987.4 million in Q1 2025 from $1,307.3 million in Q1 2024, reflecting a growth of 281.5%[15] Profitability Metrics - Gross profit margin improved to 34.5% in Q1 2025 from 27.7% in Q1 2024[11] - The operating loss margin decreased to (1.5)% from (5.7)% year-over-year[11] - Basic income per share was $0.10 compared to a loss of $0.11 per share in the prior year[11] Inventory and Sales Composition - Merchandise inventories decreased to $421.3 million in Q1 2025 from $675.8 million in Q1 2024, a reduction of 37.6%[15] - Hardware and accessories sales accounted for 47.1% of total net sales in Q1 2025, down from 57.3% in Q1 2024[19] Financing Activities - The company issued $1,500 million in convertible debt during Q1 2025, significantly impacting cash flows from financing activities[17] Adjusted EBITDA Considerations - Adjusted EBITDA for Q1 2025 was $38.6 million, compared to an adjusted EBITDA loss of $37.6 million in Q1 2024[25] - Adjusted EBITDA does not reflect cash expenditures or future capital requirements, which are significant for understanding financial performance[33] - Adjusted EBITDA excludes changes in working capital needs, impacting cash flow assessments[33] - Depreciation and amortization are non-cash charges, but future cash requirements for asset replacements are not reflected in adjusted EBITDA[33] - The computation of adjusted EBITDA may not be comparable to similar measures used by other companies, indicating potential discrepancies in financial analysis[33] Other Significant Events - The company completed the divestiture of its Canadian operations on May 4, 2025[6] - GameStop purchased 4,710 Bitcoin for cash between May 3, 2025, and June 10, 2025[6]