GameStop Corp.

Previous wording

We operate our business in four geographic segments: United States, Canada, Australia and Europe. Our fiscal year is composed of the 52 or 53 weeks ending on the Saturday closest to the last day of January. Fiscal 2024 consists of 52 weeks ending February 1, 2025 ("fiscal 2024"). Fiscal 2023 consisted of 53 weeks ended on February 3, 2024. All nine month periods presented herein contain 39 weeks. All references to years, quarters and months relate to fiscal periods rather than calendar periods. The discussion and analysis of our results of operations refers to continuing operations unless otherwise noted. Our business, like that of many retailers, is seasonal, with the major portion of the net sales realized during the fourth quarter, which includes the holiday selling season.

Current wording

We operate our business in four geographic segments: United States, Canada, Australia and Europe. Our fiscal year is composed of the 52 or 53 weeks ending on the Saturday closest to the last day of January. Fiscal 2025 consists of 52 weeks ending January 31, 2026 ("fiscal 2025"). Fiscal 2024 consisted of 52 weeks ended on February 1, 2025. All three-month periods presented herein contain 13 weeks. All references to years, quarters and months relate to fiscal periods rather than calendar periods. The discussion and analysis of our results of operations refers to continuing operations unless otherwise noted. Our business, like that of many retailers, is seasonal, with the major portion of the net sales realized during the fourth quarter, which includes the holiday selling season.

Previous wording

On December 5, 2023, the Board of Directors of the Company (the "Board") approved a new investment policy (the “Investment Policy”). Subsequently, on March 21, 2024, the Board unanimously authorized revisions to the Investment Policy to codify the role of certain members of the Board in overseeing the Company’s investments. In accordance with the revised Investment Policy, the Board has delegated authority to manage the Company’s portfolio of securities investments to an Investment Committee of the Board (the "Investment Committee") consisting of the Company’s Chairman of the Board and Chief Executive Officer, Ryan Cohen, and two independent members of the Board, together with such personnel and advisors as the Investment Committee may choose. The Company’s investments must conform to guidelines set forth in the revised Investment Policy or be approved by either the Investment Committee, by unanimous vote, or the full Board, by majority vote. Additionally, the Investment Committee may recommend to the Board further modifications to the Investment Policy from time to time.

Current wording

On March 18, 2025, our Board of Directors (the "Board") unanimously authorized a revised investment policy (the "Investment Policy"). In accordance with the Investment Policy, the Board has delegated authority to manage the Company’s portfolio of securities investments to an Investment Committee of the Board (the "Investment Committee") consisting of the Company’s Chairman and Chief Executive Officer, Ryan Cohen, as well as two independent members of the Board, together with such personnel and advisors the Investment Committee may further choose. The Investment Committee regularly reviews risks related to the Company's investment portfolio, including concentration risk. When allocating cash to various investment opportunities and considering related investment risk, the Investment Committee considers market-based factors, including risk adjusted after-tax yields. When reviewing concentration risk, the Investment Committee considers the liquidity needs of the Company, among other things.

Previous wording

The Investment Committee will direct the investment activity of the Company in public and private markets pursuant to authority granted by the Board. Depending on certain market conditions and various risk factors, Mr. Cohen or other members of the Investment Committee, each in their personal capacity or through affiliated investment vehicles, may at times invest in the same securities in which the Company invests. The Board anticipates that such investments will align the interests of the Company with the interests of related parties because it places the personal resources of such directors at risk in substantially the same manner as resources of the Company in connection with investment decisions made by the Investment Committee on behalf of the Company.

Current wording

The Investment Committee directs the investment activity of the Company in public and private markets pursuant to authority granted by the Board. Depending on certain market conditions and various risk factors, Mr. Cohen or other members of the Investment Committee, each in their personal capacity or through affiliated investment vehicles, may at times invest in the same securities in which the Company invests. The Board anticipates that such investments will align the interests of the Company with the interests of related parties because it places the personal resources of such directors at risk in substantially the same manner as resources of the Company in connection with investment decisions made by the Investment Committee on behalf of the Company.

Previous wording

•Establish Omnichannel Retail Excellence. We aim to be the leading destination for games and entertainment products through our stores and ecommerce platforms. To accomplish this, we are taking steps to ensure we are a fast and convenient solution for our customers. This includes increased product availability across all channels, faster fulfillment through ship from store offerings, and a further improved customer service experience.

Current wording

•Establish Omnichannel Retail Excellence. We aim to be the leading destination for games and entertainment products through our stores and ecommerce platforms;

Previous wording

•Achieve Profitability. During fiscal 2023, we continued to optimize our cost structure to align with our current and anticipated future needs. We will continue to focus on cost containment, including closing underperforming stores, as we look to operate with increased efficiency.

Current wording

•Achieve Profitability. During fiscal 2024, we continued to optimize our cost structure to align with our current and anticipated future needs. We will continue to focus on cost containment as we look to operate with increased efficiency; and

Previous wording

•During fiscal 2023, we exited our operations in Ireland, Switzerland, and Austria.

Current wording

•During fiscal 2023, we exited our operations in Austria, Ireland and Switzerland;

Previous wording

•On November 8, 2024, we sold our Italian subsidiary, GameStop Italy S.r.l, which operated our Italian stores and e-commerce business. The stores in Italy will continue to operate under the GameStop brand for a transition period of up to six months. We recognized impairment expense of $7.6 million on the assets during the third quarter of fiscal 2024. The proceeds and loss on the sale are expected to be immaterial to our financial results.

Current wording

•During the fourth quarter of fiscal 2024, we sold our Italian subsidiary, GameStop Italy S.r.l, which operated our Italian stores and e-commerce business; and

Previous wording

We have also initiated a comprehensive store portfolio optimization review which involves identifying stores for closure based on many factors, including an evaluation of current market conditions and individual store performance. While this review is ongoing and a specific set of stores has not been identified for closure, we anticipate that it may result in the closure of a larger number of stores than we have closed in the past few years.

Current wording

During fiscal 2024, we initiated a comprehensive store portfolio optimization review which involves identifying stores for closure based on many factors, including an evaluation of current market conditions and individual store performance. This review, among other things, resulted in the closure of 590 stores in the United States in fiscal 2024. While this review is ongoing and a specific set of stores has not been identified for closure, we anticipate closing a significant number of additional stores in fiscal 2025.

Previous wording

The Three and Nine Months Ended November 2, 2024 Compared to the Three and Nine Months Ended October 28, 2023

Current wording

The Three Months Ended May 3, 2025 Compared to the Three Months Ended May 4, 2024

Previous wording

During the three months ended November 2, 2024, net sales in our Canada, Europe, United States, and Australia segments decreased by 24.5%, 22.0%, 20.4%, and 12.5%, respectively, compared to the prior year. The decrease in consolidated net sales for the three months ended November 2, 2024 compared to the prior year was primarily attributable to a $162.0 million, or 28.0%, decline in the sale of hardware and accessories, a $49.5 million, or 15.4%, decline in the sale of software, and a $6.5 million, or 3.7%, decline in the sale of collectibles.

Current wording

During the three months ended May 3, 2025, net sales in our Europe, Canada and United States segments decreased by 47.4%, 10.3%,12.9%, respectively, compared to the prior year while the net sales in the Australia segment increased by 2.9% compared to the prior year. The decrease in consolidated net sales for the three months ended May 3, 2025 compared to the prior year was primarily attributable to a $160.0 million, or 31.7%, decline in the sale of hardware and accessories, and a $64.1 million, or 26.7%, decline in the sale of software. This was partially offset by a $74.7 million, or 54.6%, increase in the sale of collectibles.

Previous wording

During the three months ended November 2, 2024, gross profit decreased $24.6 million, or 8.7%, compared to the prior year. Gross profit as a percentage of net sales increased to 29.9%, compared to 26.1% in the prior year. The decrease in gross profit is primarily attributable to the decrease in net sales, as further outlined in the net sales commentary. The increase in gross profit as a percentage of net sales is primarily due to a shift to higher margin product categories, specifically collectibles and preowned hardware and accessories, as well as improvements in inventory management. Sales of collectibles as a percentage of total net sales increased to 19.9% for the three months ended November 2, 2024, compared to 16.5% in the prior year. Sales of preowned hardware and accessories as a percentage of total net sales increased to 11.5% for the three months ended November 2, 2024, compared to 10.2% in the prior year.

Current wording

During the three months ended May 3, 2025, gross profit increased $8.3 million, or 3.4%, compared to the prior year. Gross profit as a percentage of net sales increased to 34.5%, compared to 27.7% in the prior year. The increase in gross profit, as well as gross profit as a percentage of net sales, is primarily due to a shift to higher margin product categories, specifically collectibles and preowned hardware and accessories. Sales of collectibles as a percentage of total net sales increased to 28.9% for the three months ended May 3, 2025, compared to 15.5% in the prior year. Sales of preowned hardware and accessories as a percentage of total net sales increased to 12.5% for the three months ended May 3, 2025, compared to 10.5% in the prior year.

Previous wording

During the three months ended November 2, 2024, SG&A expenses decreased $14.5 million, or 4.9%, compared to the prior year. SG&A expenses as a percentage of sales increased to 32.8%, compared to 27.5% in the prior year.

Current wording

During the three months ended May 3, 2025, SG&A expenses decreased $67.0 million, or 22.7%, compared to the prior year. SG&A expenses as a percentage of sales decreased to 31.1%, compared to 33.5% in the prior year.

Previous wording

The decline in SG&A expenses for the three months ended November 2, 2024 compared to the prior year is primarily attributable to a reduction in labor-related, consulting service, and marketing costs of $24.4 million, driven by our continued focus on cost reduction efforts, partially offset by $14.3 million of deferred income recognized in the prior year in connection with our NFT marketplace. Additionally, store-related costs decreased $8.4 million in the current year in connection with prior year store closures, primarily in our European segment.

Current wording

The decrease in SG&A expenses for the three months ended May 3, 2025 compared to the prior year is primarily attributable to a reduction in labor-related, consulting service, and marketing costs of $25.3 million, driven by our continued focus on cost reduction efforts. Additionally, store-related costs and depreciation decreased by $21.4 million and $11.3 million, respectively, in the current year, primarily in connection with prior year store closures and international divestitures.

Previous wording

During the three and nine months ended November 2, 2024, we recognized net interest income of $54.2 million and $108.6 million, respectively, compared to net interest income of $12.9 million and $34.2 million, respectively, for the three and nine months ended October 28, 2023. The impact is primarily attributable to interest income increasing as a result of higher returns on invested cash, cash equivalents, and marketable securities, as well as return on cash received from the issuance and sale of shares of our common stock from the ATM Offering.

Current wording

During the three months ended May 3, 2025, we recognized net interest income of $56.9 million compared to net interest income of $14.9 million for the three months ended May 4, 2024. Net interest income increased primarily due to higher balances of cash and cash equivalents resulting from the issuance and sale of shares of our common stock from an "at-the-market offering" (ATM) and the Convertible Notes.

Previous wording

We recognized income tax expense of $3.4 million for the three months ended November 2, 2024, compared to an income tax benefit of $1.2 million for the three months ended October 28, 2023. Our effective income tax rate was 16.3% for the three months ended November 2, 2024 compared to 27.9% for the three months ended October 28, 2023.

Current wording

We recognized income tax expense of $3.5 million for the three months ended May 3, 2025, compared to an income tax benefit of $3.4 million for the three months ended May 4, 2024. Our effective income tax rate was 7.2% for the three months ended May 3, 2025 and 9.5% for the three months ended May 4, 2024.

Previous wording

Our effective income tax rate for the nine months ended November 2, 2024, is primarily due to tax expense recognized during the third quarter in connection with our sale of property in Ireland, and in connection with an Italian tax audit. Our effective income tax rate for nine months ended October 28, 2023, is primarily due to the recognition of tax benefits on certain current period losses, partially offset by forecasted income taxes due in certain jurisdictions in which we operate.

Current wording

Our effective income tax rate for the three and three months ended May 3, 2025 was primarily due to forecasted income taxes due in certain jurisdictions in which we operate, partially offset by tax benefits recognized in the current period.

Previous wording

Our effective income tax rate for the three months ended October 28, 2023 is primarily due to the recognition of tax benefits on certain current period losses, partially offset by forecasted income taxes due in certain jurisdictions in which we operate.

Current wording

Our effective income tax rate for the three months ended May 4, 2024 was primarily due to the recognition of tax benefits on certain period losses, partially offset by forecasted income taxes due in certain jurisdictions in which we operate.

Previous wording

Our principal sources of liquidity are cash used in operations and cash on hand. As of November 2, 2024, we had total unrestricted cash and cash equivalents on hand of $4,583.4 million and marketable securities of $32.8 million.

Current wording

Our principal sources of liquidity are cash on hand and cash provided by operations. As of May 3, 2025, we had total unrestricted cash and cash equivalents on hand of $6,385.8 million.

Previous wording

Our cash and cash equivalents are carried at fair value and consist primarily of cash, money market funds, cash deposits with commercial banks, U.S. government bonds and notes, and highly rated direct short-term instruments that mature in 90 days or less.

Current wording

Our cash and cash equivalents are carried at cost, which approximates fair value, and consists primarily of cash, money market funds, cash deposits with commercial banks, and highly rated direct short-term instruments that mature in 90 days or less.

Previous wording

Our marketable securities are carried at fair value and include investments in certain highly-rated short-term government notes, government bills, and time deposits. As of November 2, 2024, the investment portfolios' aggregate balance was $32.8 million, all of which have an original maturity in excess of 90 days and less than one year and are classified as marketable securities. See Item 1, Part I, "Notes to the Consolidated Financial Statements", Note 4, "Fair Value Measurements," for additional information.

Current wording

Our marketable securities are carried at fair value and include investments in certain highly-rated short-term government notes, government bills, and time deposits. During the first quarter of fiscal 2025, we reclassified the investment portfolios' aggregate balance of $11.4 million, all ofwhich has an original maturity in excess of 90 days and less than one year, to Assets held for sale in the Condensed Consolidated Balance Sheets. Following the reclassification, the amount is no longer included in the total marketable securities balance. See Item 1, Part I, "Notes to the Consolidated Financial Statements", Note 4, "Fair Value Measurements," for additional information.

Previous wording

In fiscal 2021, the six separate unsecured term loans held by our French subsidiary, Micromania SAS, for a total of €40.0 million, were extended for five years. As of November 2, 2024, $20.5 million remains outstanding.

Current wording

In fiscal 2021, the six separate unsecured term loans held by our French subsidiary, Micromania SAS, for a total of €40.0 million, were extended for five years. During the first quarter of fiscal 2025, we reclassified the French Term Loans to Liabilities held for sale on the Condensed Consolidated Balance Sheets where it continues to be measured at the lower of its carrying amount and fair value less costs to sell. As of May 3, 2025, $15.7 million remains outstanding.

Previous wording

We maintain uncommitted facilities with certain lenders that provide for the issuance of letters of credit and bank guarantees, at times supported by cash collateral. As of November 2, 2024, we had letters of credit and other bank guarantees outstanding in the amount of $20.2 million.

Current wording

We maintain uncommitted facilities with certain lenders that provide for the issuance of letters of credit and bank guarantees, at times supported by cash collateral. As of May 3, 2025, we had letters of credit and other bank guarantees outstanding in the amount of $9.0 million.

Previous wording

Pursuant to the prospectus supplement relating to the ATM Offering filed with the SEC on May 17, 2024 (the “May Prospectus Supplement”), we sold an aggregate of 45.0 million Common Shares for aggregate gross proceeds before commissions and offering expenses of approximately $933.4 million.

Current wording

Pursuant to the prospectus supplement relating to the ATM Offering filed with the SEC on May 17, 2024 (the “May Prospectus Supplement”), we sold an aggregate of 45.0 million Common Shares for aggregate gross proceeds before commissions and offering expenses of approximately$933.4 million.

Previous wording

Pursuant to the prospectus supplement relating to the ATM Offering filed with the SEC on June 7, 2024, (the “June Prospectus Supplement”), we sold an aggregate of 75.0 million additional Common Shares for aggregate gross proceeds before commissions and offering expenses of approximately $2137.0 million.

Current wording

Pursuant to the prospectus supplement relating to the ATM Offering filed with the SEC on June 7, 2024, (the “June Prospectus Supplement”), we sold an aggregate of 75.0 million additional Common Shares for aggregate gross proceeds before commissions and offering expenses of approximately 2,137.0 million.

Previous wording

Pursuant to the prospectus supplement relating to the ATM Offering filed with the SEC on September 10, 2024, (the “September Prospectus Supplement”), we sold an aggregate of 20.0 million additional Common Shares for aggregate gross proceeds before commissions and offering expenses of approximately $400.0 million.

Current wording

Pursuant to the prospectus supplement relating to the ATM Offering filed with the SEC on September 10, 2024, (the “September Prospectus Supplement”), we sold an aggregate of 20.0 million additional Common Shares for aggregate gross proceeds before commissions and offering expenses of approximately$400.0 million.

Previous wording

We intend to use the net proceeds from the ATM Offering for general corporate purposes, which may include acquisitions and investments in a manner consistent with the Investment Policy.

Current wording

We intend to use the net proceeds from the Convertible Notes for general corporate purposes, including the acquisition of Bitcoin in a manner consistent with the Company’s Investment Policy..

Previous wording

Cash used in operating activities were an outflow of $16.6 million during the nine months ended November 2, 2024, compared to an outflow of $192.7 million during the nine months ended October 28, 2023.

Current wording

Cash provided by operating activities was$192.5 million during the three months ended May 3, 2025, compared to cash used in operating activities of $109.8 million during the three months ended May 4, 2024.

Previous wording

Cash used in operating activities during the nine months ended November 2, 2024 decreased compared to the nine months ended October 28, 2023 primarily due to an increase in net income and a decrease in merchandise inventory purchases.

Current wording

Cash provided by operating activities during the three months ended May 3, 2025 was primarily due to the impact of our net income, an increase in trade payables, and a decrease in merchandise inventories.

Previous wording

Cash provided by investing activities during the nine months ended November 2, 2024 was primarily attributable to proceeds from the maturity of marketable securities and proceeds from the sale of property and equipment in our Europe segment, partially offset by purchases of marketable securities and routine capital expenditures. Cash used in investing activities during the nine months ended October 28, 2023 was primarily attributable to purchases of marketable securities and ongoing technological investments, partially offset by proceeds from sales and maturities of marketable securities, as well as proceeds from the sale of property and equipment in our Europe segment.

Current wording

Cash provided by investing activities during the three months ended May 3, 2025 was primarily attributable to proceeds from the maturity of marketable securities, partially offset by purchases of marketable securities and routine capital expenditures.

Previous wording

Cash flows provided by financing activities were an inflow of $3,445.5 million during the nine months ended November 2, 2024 compared to an outflow of $8.1 million during the nine months ended October 28, 2023.

Current wording

Cash flows provided by financing activities were $1,478.0 million during the three months ended May 3, 2025 compared to cash flows used by financing activities of $2.7 million during the three months ended May 4, 2024.

Previous wording

Cash flows provided by financing activities during the nine months ended November 2, 2024 was primarily due to net proceeds of $3,453.8 million received from the issuance of shares of our common stock in connection with the ATM Offering, partially offset by repayments on our government-guaranteed low interest French term loans due October 2022 through October 2026. Cash flows used by financing activities during the nine months ended October 28, 2023 was attributable to the repayments on our government-guaranteed low interest French term loans due October 2022 through October 2026 and the settlement of stock-based awards.

Current wording

Cash flows provided by financing activities during the three months ended May 3, 2025 was primarily due to gross proceeds of $1,500.0 million received from the issuance of the Convertible Notes, partially offset by Convertible Note issuance costs and repayments on our government-guaranteed low interest French term loans due October 2022 through October 2026.

Previous wording

In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." This standard enhances disclosures related to income taxes, including the rate reconciliation and information on income taxes paid. This ASU becomes effective January 1, 2025. The Company is assessing the impact of this ASU and, upon adoption, expects to include certain additional disclosures in the footnotes to its consolidated financial statements.

Current wording

In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." This standard enhances disclosures related to income taxes, including the rate reconciliation and information on income taxes paid. This ASU is effective for annual periods beginning after December 15, 2024.