GameStop Corp.

1. General Information

The Company

GameStop Corp. ("GameStop," "we," "us," "our," or the "Company"), a Delaware corporation established in 1996, offers games, collectibles, and entertainment products through its stores and ecommerce platforms.

We operate ourbusiness inthree geogr aphic segments: United States, Australia and Europe. During the second quarter of fiscal 2025, we divested our operations in Canada, which previously comprised afourth separate reporting segment. See Note 8, "Segment Information," for additional information. The information contained in these condensed consolidated financial statements refers to continuing operations unless otherwise noted.

Basis of Presentation and Consolidation

The condensed consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated financial statements included herein reflect all adjustments (consisting only of normal, recurring adjustments) which are, in our opinion, necessary for a fair presentation of the information for the periods presented. These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they exclude certain disclosures required under GAAP for complete consolidated financial statements.

The accompanying condensed consolidated financial statements and notes are unaudited. The condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended January 31, 2026 ("fiscal 2025") filed with the Securities and Exchange Commission ("SEC") on March 24, 2026. Due to the seasonal nature of our business, our results of operations for the three months ended May 2, 2026 are not necessarily indicative of our future results for the year ending January 30, 2027 ("fiscal 2026").

Our fiscal year is composed of the 52 or 53 weeks ending on the Saturday closest to the last day of January. Fiscal 2026 consists of 52 weeks ending January 30, 2027. Fiscal 2025 consisted of 52 weeks ended on January 31, 2026. 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 a significant portion of sales and operating profit realized during the fourth quarter of the fiscal year, which includes the holiday selling season. Although the fourth quarter remains our largest period, its relative contribution has moderated compared to historical levels.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and accompanying footnotes. We regularly evaluate the estimates related to our assets and liabilities, contingent assets and liabilities, and the reported amounts of revenues and expenses. In preparing these condensed consolidated financial statements, we have made our best estimates and judgments of certain amounts recognized in the condensed consolidated financial statements, giving due consideration to materiality. Changes in the estimates and assumptions that we have used could have a significant impact on our financial results. Actual results could differ from those estimates.

2. Summary of Significant Accounting Policies

Included below are certain updates related to policies included in Part II, Item 8 "Notes to Consolidated Financial Statements,"Note 2, Summary of Significant Accounting Policies," in the 2025 Annual Report on Form 10-K.

Cash, Cash Equivalents and Restricted Cash

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 with an original maturity of 90 days or less. Our Restricted cash is also carried at cost, which approximates fair value, and consists primarily of bank deposits that collateralize our obligations to vendors and landlords.

The following table presents a reconciliation of Cash and cash equivalents and Restricted cash in our condensed consolidated balance sheets to total Cash and cash equivalents and Restricted cash in our condensed consolidated statements of cash flows:

(1) Recognized in Prepaid expenses and other current assets on our condensed consolidated balance sheets.

(2) Recognized in Other noncurrent assets on our condensed consolidated balance sheets.

Investments

We have invested a portion of our excess cash in investment grade short-term fixed income securities, which primarily consist of U.S. government and agency securities, commercial paper, as well as time deposits. Investments with an original maturity in excess of 90 days and less than one year are classified as Marketable securities on our condensed consolidated balance sheets. We classify these investments as available-for-sale debt securities and record them at fair value. Unrealized holding gains and losses are recognized in Accumulated other comprehe nsive loss on our condensed consolidated balance sheets. Realized gains and losses upon sale or extinguishment are reported in Other income, net in our condensed consolidated statements of operations. Each reporting period, we evaluate declines in fair value to determine whether they are attributable to expected credit losses and assess our ability and intent to hold the investment until recovery.

Derivative Asset

During the first quarter of fiscal 2026, the Company entered into a series of paired put and call option transactions (the "Put/Call Pairs") providing economic exposure to 22,176,000 shares of eBay Inc. (“eBay”) common stock, par value $0.001 per share (the "eBay Common Stock"). The Put/Call Pairs are measured at fair value each period, with changes in the fair value recorded in Unrealized gain on derivative asset, net in the condensed consolidated statement of operations as a nonoperating activity. In addition, the Company acquired direct beneficial ownership of 25,000 shares of eBay Common Stock. Collectively, these positions represented an approximately 5% economic interest in the outstanding eBay Common Stock, based on the 444 million shares reported by eBay as outstanding as of April 24, 2026 in its most recent quarterly report on Form 10-Q filed with the SEC on April 29, 2026.

The Put/Call Pairs are scheduled to expire on February 23, 2028. As of May 2, 2026, the Company's condensed consolidated financial statements present a Derivative asset balance of $285.3 million within current assets in its condensed consolidated balance sheets, as the Company intends to exercise these options within the next twelve months.

Each Put/Call Pair, a combination of non-transferable embedded purchased call option and non-transferable embedded written put option entered into contemporaneously with the same counterparty, is accounted for as a single forward contract. Under the master agreement governing all Put/Call Pairs (the "Master Agreement"), all payment and share delivery obligations between the Company and the counterparty are subject to netting.

The Master Agreement provides for the exchange of cash collateral when the fair value of the Put/Call Pairs exceeds or falls below specified contractual thresholds. Cash collateral posted by the Company is held in a restricted account in the Company’s name, but controlled by the counterparty. As of May 2, 2026, the Company had pledged$983.3 million of collateral in connection with the Put/Call Pairs, which is presented as Collateral pledged for derivative asset in the condensed consolidated balance sheets.

The Put/Call Pairs also include a cross-default provision that may be exercised by the counterparty if the Company defaults on certain indebtedness. As of May 2, 2026, no additional collateral would have been required if this provision had been triggered;

based on the$285.3 million fair value of the instruments, the Company would expect a net settlement inflow upon termination. The Company presents the gross fair value of its derivative assets and derivative liabilities in the condensed consolidated balance sheets. Cash collateral pledged to or received from counterparties is recorded on a gross basis within Collateral pledged for derivative asset and is not offset against the fair value of the derivative instruments.

Recent Accounting Pronouncements

Recently issued accounting pronouncements not yet adopted

In November 2024, the FASB issued ASU No. 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses", as clarified by ASU No. 2025-01, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40); Clarifying the Effective Date." (collectively, 'ASU No. 2024-03'). The guidance includes amendments to require public companies to provide additional disaggregated information about certain costs and expenses in a tabular format. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on the Company’s condensed consolidated financial statements.

In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The ASU clarifies interim disclosure requirements and the applicability of Topic 270. The objective of the amendments is to provide further clarity about the current interim disclosure requirements. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Adoption of this ASU can be applied either a prospective or a retrospective approach. Early adoption is permitted. We are currently evaluating the provisions of this ASU and do not expect this ASU to have a material impact on our consolidated financial statements.

In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements. The ASU addresses thirty-three items, representing the changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements. Generally, the amendments in this update are not intended to result in significant changes for most entities. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2026. The adoption method of this ASU may vary, on an issue-by-issue basis. Early adoption is permitted. We are currently evaluating the provisions of this ASU and do not expect this ASU to have a material impact on our consolidated financial statements.

In April 2026, the FASB issued ASU No. 2026-01, Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends

on Equity-Classified Preferred Stock. The ASU provides guidance on how an issuer should initially measure paid-in-kind (PIK) dividends on equity-classified preferred stock. The amendments do not affect an entity's determination of when to recognize PIK dividends. The update requires that PIK dividends on equity-classified stock be initially measured on the basis of the PIK dividend rate stated in the preferred stock agreement. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2026. Early adoption is permitted in an interim or annual period. We are currently evaluating the provisions of this ASU and do not expect this ASU to have a material impact on our consolidated financial statements.

3. Revenue

The following table presents Net sales by significant product category:

(1) Includes sales of new and pre-owned hardware, accessories, hardware bundles in which hardware and digital or physical software are sold together in a single SKU, interactive game figures, strategy guides, mobile and consumer electronics.

(2) Includes sales of new and pre-owned gaming software, digital software, and PC entertainment software.

(3) Includes the sale of apparel, toys, trading cards, gadgets, other retail products for pop culture and technology enthusiasts, and submission services for the authentication and grading of trading cards.

See Note 8, "Segment Information," for Net sales by geographic location.

Performance Obligations

We have arrangements with customers where our performance obligations are satisfied over time, which primarily relate to extended warranties and our GameStop Pro® rewards program.

We expect to recognize revenue in future periods for remaining performance obligations we have associated with unredeemed gift cards, trade-in credits, reservation deposits and loyalty points earned as part of our GameStop Pro® rewards program (collectively, "unredeemed customer liabilities"), extended warranties, and subscriptions to our GameStop Pro® rewards program.

Performance obligations associated with unredeemed customer liabilities are primarily satisfied at the time customers redeem gift cards, trade-in credits, customer deposits or loyalty program points for products that we offer. Unredeemed customer liabilities are generally redeemed within one year of issuance.

We offer extended warranties on certain new and pre-owned products with terms generally ranging from 12 to 24 months, depending on the product. Revenues for extended warranties sold are recognized on a straight-line basis over the life of the contract.

Revenues for subscriptions to our GameStop Pro® rewards program are recognized on a straight-line basis over a 12-month subscription term.

The following table presents our performance obligations recognized in Accrued liabilities and other current liabilities on our condensed consolidated balance sheets:

Significant Judgments and Estimates

We accrue loyalty points related to our GameStop Pro® rewards program at the estimated retail price per point, net of estimated breakage, which can be redeemed by loyalty program members for products we offer. The estimated retail price per point is based on the actual historical retail prices of products purchased through the redemption of loyalty points. We estimate breakage of loyalty points and unredeemed gift cards based on historical redemption rates.

Contract Balances

Our contract liabilities primarily consist of unredeemed customer liabilities and deferred revenues associated with gift cards, extended warranties and subscriptions to our GameStop Pro® rewards program.

The following table presents a roll forward of our contract liabilities:

(1) Includes issuances of gift cards, trade-in credits and loyalty points, new reservation deposits, new subscriptions to our GameStop Pro® rewards program and extended warranties sold.

(2) Consists of redemptions and breakage of gift cards, and trade-in credits, redemptions and breakage of reservation deposits, and expiration of loyalty points. Additionally, this includes revenues recognized for our GameStop Pro® rewards program and extended warranties. During the three months ended May 2, 2026 and May 3, 2025, there were $41.5 million and $28.4 million, respectively, of gift cards redeemed that were previously outstanding as of January 31, 2026 and February 1, 2025, respectively.

(3) Primarily includes Foreign currency translation adjustments in the current year period, and deferred revenue and accrued loyalty points in France which were reclassified to liabilities held for sale in the prior year period.

4. Fair Value Measurements

Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Applicable accounting standards require disclosures that categorize assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. Each fair value measurement is reported in one of the following three levels:

•Level 1 inputs are quoted prices in active markets for identical assets or liabilities;

•Level 2 inputs are observable inputs other than quoted prices included in Level 1 for the asset or liability, either directly or indirectly through market-corroborated inputs; and

•Level 3 inputs are unobservable inputs for the asset or liability reflecting our assumptions about pricing by market participants.

Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

Assets and liabilities that are measured at fair value on a recurring basis include our Cash equivalents, Marketable securities, Digital assets, Digital assets receivable, Derivative assets and liabilities, company-owned life insurance policies with a cash surrender value, and certain nonqualified deferred compensation liabilities.

We measure the fair value of cash equivalents, certain marketable securities and digital assets based on quoted prices in active markets for identical assets. Other marketable securities were valued either based on recent trades of securities in inactive markets or basedon quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data.

Our investments in time deposits are reported at fair value and utilize Level 1 inputs for measurement.

We measure the fair value of our derivative assets and liabilities, digital assets receivable, life insurance policies with cash surrender values and certain nonqualified deferred compensation liabilities based on Level 2 inputs using quotations provided by major market news services, such as Bloomberg, and industry-standard models that consider various assumptions, including quoted forward prices, time value, volatility factors, contractual prices for the underlying instruments, and other relevant economic measures, all of which are observable in active markets.

When appropriate, valuations are adjusted to reflect credit considerations, generally based on available market evidence.

The following tables present our assets and liabilities measured at fair value on a recurring basis:

(1) Recognized in "Marketable securities" on our condensed consolidated balance sheets.

(2) Recognized in "Digital assets and related receivables" on our condensed consolidated balance sheets. During fiscal 2025, the Company pledged portion of its digital assets as collateral in connection with a covered‑call strategy, which resulted in the derecognition of the pledged digital assets and the corresponding recognition of a digital asset receivable.

(3) Recognized in "Derivative asset" on our condensed consolidated balance sheets. See Note 10,"Derivative Asset," for additional information.

(4) Recognized in "Other noncurrent assets" on our condensed consolidated balance sheets.

(5) Recognized in "Accrued liabilities and other current liabilities" on our condensed consolidated balance sheets. See Note 11,"Digital assets and Related Receivables," for additional information.

(6) Recognized in "Assets held for sale" on our condensed consolidated balance sheets. During the first quarter of fiscal year 2025 we reclassified$11.4 million of our marketable securities to assets held for sale, on our condensed consolidated balance sheets.

Assets that are Measured at Fair Value on a Nonrecurring Basis

Assets that are measured at fair value on a nonrecurring basis relate primarily to Property and equipment, Operating lease right-of-use ("ROU") assets and Other intangible assets, which are remeasured when the estimated fair value is below its carrying value. When we determine that impairment has occurred, the carrying value of the asset is reduced to its fair value. No such remeasurements were recorded during the quarter.

The carrying value of our Cash, Restricted cash, Net receivables, Collateral pledged for derivative asset, Accounts payable and Current portion of debt approximate their fair values due to their short-term maturities.

The fair value estimates of trade name intangibles and store-level property and equipment are based on significant unobservable inputs (Level 3) developed using company-specific information. These assets were valued using variations of the discounted cash flow method, which require assumptions associated with, among others, projected sales and cost estimates, capital expenditures, royalty rates, discount rates, terminal values and remaining useful lives.

During the first quarter of fiscal 2025, management approved a plan to divest the Company's operations in France. In connection with this plan, we reclassified thedebt related to the French disposal group to Liabilities held for sale, within our condensed consolidated balance sheets. The debt had previously been included in the Company's consolidated debt balances and consisted of government-subsidized low interest French term loans maturing from October 2022 through October 2026 ("French Term Loans")

As of May 2, 2026, the French Term Loans included in Liabilities held for sale had a carrying value of $8.9 million and a fair value of $8.8 million. The fair value of our French Term Loans were estimated using a discounted cash flow model that incorporates interest rates available to the Company for similar debt with comparable maturities. The valuation technique uses Level 2 inputs within the fair value hierarchy.

On October 7,2025, the Company announced that the Board declared the Warrant Distribution. The Company estimated the fair value of the Warrants using the Black-Scholes option pricing model (Level 3). The estimated fair value of each Warrant on the issuance date was $2.94 and the$173.9 million aggregate fair value of the Warrants was recorded as additional paid-in-capital. Of this aggregate fair value amount,$42.2 million was distributed to the holders of the Convertible Notes and recognized as interest expense and$131.7 million was distributed to stockholders and recorded to retained earnings.

5. Debt

As of May 2, 2026, May 3, 2025 and January 31, 2026, there was $4,166.1 million, $1,480.7 million and $4,164.3 million of outstanding debt, respectively. In addition, $8.9 million, $11.4 million and$7.5 million ofdebt associated with the French disposal group was classified as current and included in Liabilities held for sale in the condensed consolidated balance sheets as of those dates.

Convertible Senior Notes

Convertible 2030 Notes

On April 1, 2025, we completed a private offering of$1,500.0 million aggregate principal amount of the Convertible 2030 Notes, including the exercise in full of the initial purchaser's option to purchase up to an additional $200 million aggregate principal amount of the Convertible 2030 Notes. The Convertible 2030 Notes are general unsecured obligations of the Company. The Convertible 2030 Notes were issued pursuant to an Indenture, dated April 1, 2025 (the "2030 Indenture"), between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). As of May 2, 2026, the balance of the Convertible 2030 Notes, net of debt issuance costs of $15.4 million was $1,484.6 million. The Company determines the fair value of its Convertible 2030 Notes in accordance with ASC 820, Fair Value Measurement, using observable market inputs on a secondary market exchange (Level 2 input). As of May 2, 2026, the fair value of the Convertible 2030 Notes was approximately $1,675.4 million.

Convertible 2032 Notes

On June 17, 2025, we completed a private offering of $2,250.0 million aggregate principal amount of the Convertible 2032 Notes. Pursuant to the purchase agreement between the Company and the initial purchaser of the Convertible 2032 Notes, the Company granted the initial purchaser an option to purchase up to an additional $450.0 million aggregate principal amount of the Convertible 2032 Notes (the "Additional Notes"). On June 23, 2025, the initial purchaser elected to exercise in full such option, and on June 24, 2025, the Company issued the full aggregate principal amount of the Additional Notes. The Convertible 2032 Notes are general unsecured obligations of the Company. The Convertible 2032 Notes were issued pursuant to an Indenture, dated June 17, 2025 (the "2032 Indenture"), between the Company and the Trustee, as trustee. As of May 2, 2026, the balance of the Convertible 2032 Notes, net of debt issuance costs of $18.5 million was $2,681.5 million. The Company determines the fair value of its Convertible 2032 Notes in accordance with ASC 820, Fair Value Measurement, using observable market inputs on a secondary market exchange (Level 2 input). As of May 2, 2026, the fair value of the Convertible 2032 Notes was approximately $3,000.5 million.

Credit Facilities

We maintain uncommitted letter of credit facilities with certain banks that provide for the issuance of letters of credit and bank guarantees, at times supported by cash collateral. See Note 6, "Commitments and Contingencies," for further information regarding outstanding stand-by letters of credit and other bank guarantees.

6. Commitments and Contingencies

Commitments

As of May 2, 2026, we had approx imately $7.2 million of outstanding stand-by letters of credit and other bank guarantees supported by $6.0 million ofcash collateral that is included in restricted cash.

Legal Proceedings

In the ordinary course of business, we are, from timeto time, subject to various legal proceedings, including matters involving wage and hour employee class actions, stockholder actions, and 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.

7. Earnings Per Share

Basic Net income per common share is computed by dividing the Net income available to Class A Common Stockholders by the weighted-average number of common shares outstanding during the period. Diluted Net income per common share is computed by dividing the Net income available to Class A Common Stockholders by the weighted-average number of common shares outstanding and potentially dilutive securities outstanding during the period. Potentially dilutive securities include shares from Convertible Notes, stock options, Warrants, unvested restricted stock and unvested restricted stock units outstanding during the period, using the treasury stock method. Potentially dilutive securities are excluded from the computations of diluted earnings per share if their effect would be anti-dilutive. For example, the Warrants are anti-dilutive and excluded from the diluted earnings per share computations primarily because the exercise price is significantly above the average market price. A Net loss from continuing operations causes all potentially dilutive securities to be anti-dilutive.

The following table presents a reconciliation of shares used in calculating basic and diluted Net income (loss) per common share: