GameStop Corp.

15. Income Taxes

The following table presents the provision for income taxes from continuing operations:

The following table presents the components of income/(loss) from continuing operations before income taxes:

The following table reconciles the U.S. federal statutory tax rate to our effective income tax rate on income from continuing operations, presenting both dollar amounts and percentages in accordance with ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This disclosure reflects the disaggregation of specific tax categories for the current reporting period:

(1) State and local taxes in Arizona, Illinois, New Jersey, New York, and New York City accounted for more than 50% of the tax effect in this category.

The following table provides the disclosures required before adopting ASU 2023-09 and reconciles our effective tax rate with the U.S. federal tax rate:

(1) Other is comprised of numerous items, none of which is individually or in the aggregate greater than 5% of income tax expense calculated at the statutory rate.

Upon adoption of ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, cash paid for income taxes, net of refunds, disaggregated by jurisdiction, was as follows:

Differences between financial accounting principles and tax laws cause differences between the bases of certain assets and liabilities for financial reporting purposes and tax purposes. The tax effects of these differences, to the extent they are temporary, are recorded as deferred tax assets and liabilities which are presented in the table below.

During fiscal 2025, we increased our valuation allowances by a net $111.9 million. This net change reflects increases of approximately $253.0 million of increases in certain international jurisdictions where additional losses were generated and the related deferred tax assets are not expected to be realizable, partially offset by approximately $141.1 million of releases in jurisdictions that returned to profitability after previously being in cumulative loss positions. As of January 31, 2026, we maintain full valuation allowances on all international deferred tax assets except those in Australia, and we maintain valuation allowances on only certain deferred tax assets in the United States, rather than a full valuation allowance. We will continue to assess the realizability of our gross and net deferred tax assets in all tax jurisdictions in future reporting periods.

With respect to state and local jurisdictions and countries outside of the United States, we and our subsidiaries are typically subject to examination for 3 to 6 years after the relevant income tax returns have been filed. Although the outcome of tax audits is inherently uncertain, we believe that adequate provisions for tax, interest and penalties have been recorded in the accompanying consolidated financial statements for any adjustments that may arise from state, local or foreign tax examinations.

As of January 31, 2026, we had approximately $30.9 million of U.S. federal net operating loss ("NOL") carryforwards acquired through the ThinkGeek acquisition, which will expire in years 2031 through 2036, We also had $275.5 million of state NOL carryforwards, of which $239.0 million will expire between 2025 to 2044, $26.9 million have no expiration date, and $9.5 million, acquired through the ThinkGeek acquisition, will expire between 2029 through 2036.

Section 382 under the Internal Revenue Code imposes limitations on the utilization of tax attributes following an ownership change. The federal and state NOL carryforwards acquired through the ThinkGeek acquisition experienced an ownership change on July 17, 2015, and we have determined that these NOLs will be subject to future utilization limitations.

We have approximately $2.2 million of foreign tax credit carryforwards that expire between 2025 through 2027, and approximately $1,366.4 million of foreign NOL carryforwards in various jurisdictions that have no expiration period, substantially all of which relate to Luxembourg and were generated primarily from impairments of international subsidiaries that we have divested or are currently held for sale.

As of January 31, 2026, the gross amount of unrecognized tax benefits was approximately $5.0 million. If we were to prevail on all uncertain tax positions, the net effect would result in approximately a $5.0 million benefit to our effective tax rate, excluding any related to interest and penalties.

The following table presents a reconciliation of the changes in the gross balances of unrecognized tax benefits:

We recognize accrued interest and penalties related to unrecognized tax benefits within income tax expense in our Consolidated Statement of Operations. As of January 31, 2026, February 1, 2025, and February 3, 2024, we had approximately $2.0 million, $2.2 million and $1.6 million, respectively, of accrued interest and penalties. During fiscal 2025, 2024 and 2023, we recognized approximately $0.2 million of benefit, $0.6 million of expense and $2.1 million of benefit, respectively, in income tax expense related to those items. If we were to prevail on all uncertain tax positions, the reversal of these accrued interest and penalties would result in a corresponding benefit to our effective tax rate.

It is reasonably possible that the amount of the unrecognized benefits with respect to certain positions could significantly increase or decrease within the next 12 months as a result of resolving ongoing audits. However, because audit outcomes and timing are inherently uncertain, and given the complexity of the issues involved, we are unable to reasonably estimate the potential change, if any, in unrecognized tax benefits during that period. Nevertheless, we believe our reserves for uncertain tax positions are adequate as of January 31, 2026.

We do not assert indefinite reinvestment with respect to the undistributed earnings of our foreign subsidiaries. Income taxes and/or withholding taxes associated with amounts available for distribution as of January 31, 2026 are not expected to be material to our financial statements.

The Organization for Economic Co-operation and Development ("OECD"), supported by more than 140 member countries, has agreed to implement a global minimum tax rate of 15% tax on certain multinational enterprises under the Pillar Two framework. These rules began taking effect across various jurisdictions in 2024 as countries enacted legislation aligned with the OECD model. In fiscal 2025, the Company did not incur any Pillar Two top-up taxes and therefore recorded no related impact to the fiscal 2025 effective tax rate. The Company will continue to evaluate additional OECD guidance, as well as pending and enacted legislation in the jurisdictions in which we operate.

16. Commitments and Contingencies

Commitments

As of January 31, 2026, we had approximately $6.7 million of outstanding Stand-By Letters of Credit and other bank guarantees supported by $5.5 million of cash collateral that is included in restricted cash.

As of January 31, 2026, we have purchase obligations of$128.7 million with payment dates through fiscal 2026 that represent outstanding purchase orders for merchandise from vendors. These purchase orders are generally cancellable until shipment of the products.

See Note 9, "Leases," for information regarding commitments related to our non-cancelable operating leases.

In the ordinary course of business, we are, from time to time, subject to various legal proceedings, including matters involving wage and hour employee class actions, stockholder actions, consumer class actions, violent acts, and other conflicts. We may enter into discussions regarding settlement of these and other types of lawsuits, and may enter into settlement agreements, if we believe settlement is in the best interest of our stockholders. We do not believe that any such existing legal proceedings or settlements, individually or in the aggregate, will have a material effect on our financial condition, results of operations or liquidity.