GameStop Corp.

8. Segment Information

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.

We identified segments based on a combination of geographic areas and management responsibility. Segment results for the United States include retail operations in 50 states; our ecommerce website www.gamestop.com; and our GameStop Pro® loyalty program. The United States segment also includes general and administrative expenses related to our corporate offices in Grapevine, Texas.

Segment results for Canada reflect retail and ecommerce operations previously conducted in Canada, which were divested during the second quarter of the prior fiscal year, and are not included in the current fiscal year.

Segment results for Australia include retail and ecommerce operations in Australia. These results also previously included operations in New Zealand, which were closed during the fourth quarter of the prior fiscal year.

Current year segment results for Europe include retail and ecommerce operations in France. Segment results for Europe also previously included retail operations in Italy, Germany, Austria, Ireland and Switzerland.

Our chief operating decision makers (“CODM”) are our Chief Executive Officer and our Principal Financial and Accounting Officer, who have responsibility for allocating resources and assessing performance for the operating segments. Our CODM measures segment profit using Operating income (loss), which is defined as Net income (loss) adjusted to exclude non‑operating items, including Interest income, net, Income tax expense (benefit), Loss (gain) on digital assets and related receivables, and Unrealized gain on derivative assets, net.

Transactions between our reportable segments consist primarily of royalties, management fees, intersegment loans and related interest. There were no material intersegment sales during the three months ended May 2, 2026 and May 3, 2025. Information on total assets by segment is not disclosed as such information is not used by our CODM to evaluate segment performance or to allocate resources and capital.

The following tables present segment information:

(1) Property and equipment, net for France (Europe) is classified as Assets held for sale on our condensed consolidated balance sheets.

(1) Property and equipment, net for Canada and France (Europe) is classified as Assets held for sale on our condensed consolidated balance sheets.

9. Assets Held for Sale

During the first quarter of fiscal 2025, management approved a plan to divest the Company’s operations in Canada and France. During the second quarter of fiscal 2025, the Company completed the sale of its Canadian subsidiary, Electronic Boutique Canada, Inc., which operated its Canadian retail stores and e-commerce business. Prior to the sale, the assets and liabilities of the Canadian operations were classified as held for sale in the Company’s condensed consolidated balance sheet as of May 3, 2025. Upon completion of the sale, those assets and liabilities were derecognized and are no longer reflected in held-for-sale balances in subsequent periods.

The Company continues to classify the assets and liabilities of its France operations as held for sale. Accordingly, as of May 2, 2026 and January 31, 2026, the assets and liabilities classified as held for sale relate solely to the France operations, while amounts as of May 3, 2025 include both the Canada and France operations. The components are as follows:

Based on the estimated fair value of these businesses, less costs to sell, the Company recognized an impairment charge of$35.5 million on assets held for sale related to the French and Canadian disposal groups during the first quarter of fiscal 2025.

For fiscal 2025 and the first quarter of fiscal 2026, the Company recognized net impairment charges of$30.6 million and a net impairment reversal of$4.6 million, respectively, related to the French disposal group. These amounts reflect the remeasurement of the carrying value of the French disposal group to fair value, less costs to sell, and include the impact of adjustments previously recorded in Accumulated other comprehensive income.

As of May 2, 2026, the French disposal group included$152.4 million of Assets held for sale and$143.0 million of Liabilities held for sale. The Company expects to complete the sale of its France operations within the next twelve months. Assets and Liabilities classified as held for sale are presented separately in the condensed consolidated balance sheets.

10. Derivative Asset

During the first quarter of fiscal 2026, the Company entered into Put/Call Pairs providing economic exposure to 22,176,000 shares of eBay Common Stock. 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. 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.

The Put/Call Pairs were settleable solely in cash until such time as the Company provided the counterparty with evidence that all applicable filings had been made and any required waiting periods had expired or approvals had been obtained under the Hart‑Scott‑Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act Condition”). The HSR Act Condition was satisfied on June 3, 2026. See Note 14, "Subsequent Events," for further information regarding the Put/Call Pairs, including with regard to additional Put/Call Pairs entered into after May 2, 2026.

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.

Under the Master Agreement, all payment and share delivery obligations between the Company and the counterparty are subject to netting. 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 the derivative asset in its condensed consolidated balance sheets.

As of May 2, 2026, the fair value of the Put/Call Pairs was$285.3 million, classified as Level 2 within the ASC 820 fair value hierarchy and presented as Derivative asset within Current assets in the condensed consolidated balance sheets. For the three months ended May 2, 2026, the Company recognized an unrealized mark-to-market gain of$285.3 million on a gross basis. This amount is presented net of certain transaction-related costs in Unrealized gain on derivative asset, net within nonoperating income in the condensed consolidated statements of operations. The Put/Call Pairs have not been designated as hedging instruments. The objective for holding these derivatives is to obtain economic exposure to eBay Common Stock.

The following table presents the Company's derivative asset holdings as of May 2, 2026:

(1)The Put/Call Pairs were acquired in tranches with strike prices ranging between$84.40 to$95.49.

(2) Actual amount; not in millions.

11. Digital Assets and Related Receivables

The Company measures its in-scope Digital assets at fair value under ASC 350-60 with fair value determined in accordance with ASC 820. Bitcoin is initially recorded at cost, and subsequently remeasured using unadjusted quoted prices in the principal market that we have identified for Bitcoin (currently, the Coinbase exchange), which we consider an active market. Because the fair value is derived from quoted prices for an identical asset in an active market, Bitcoin is classified within Level 1 of the fair value hierarchy. Unrealized gains and losses from changes in Bitcoin's fair value are recognized in the condensed consolidated statements of operations as Gain on digital assets and related receivables, and are presented as nonoperating activity.

During the second quarter of fiscal year 2025, the Company purchased 4,710 Bitcoin.

During the fourth quarter of fiscal year 2025, the Company entered into an agreement (the "Collateral Agreement") with Coinbase Credit, Inc. (the "counterparty"), under which the Company sold covered call options on a portion of the Bitcoin it owns. The options are accounted for as derivatives under ASC 815 and are not designated as hedging instruments.

Our covered-call contracts are over-the-counter ("OTC") derivatives entered into with Coinbase Credit, Inc. and are typically short-dated. Under the agreements, Bitcoin is pledged as collateral and can be rehypothecated, re-pledged, or otherwise deployed by Coinbase. As of May 2, 2026, we had outstanding covered‑call option contracts referencing approximately 4,709 Bitcoin, with a strike price of $80,000 and a maturity extending through May 29, 2026. Subsequent to the end of the period, these contracts expired on May 29, 2026, and the Company entered into new covered-call option contracts. These contracts resulted in a derivative liability on digital assets of $8.4 million as of May 2, 2026, which is presented within Accrued liabilities and other current liabilities, and an associated Unrealized loss of approximately $1.8 million during the first quarter of fiscal 2026. No Derivative assets were recognized as of the reporting date related to the covered call options. Premiums received at inception are initially recorded on the condensed consolidated balance sheets, and subsequently reflected in earnings consistent with the subsequent fair value changes of the related options.

The fair value of these written options is measured using standard option-pricing models incorporating observable market inputs, including Bitcoin spot prices, implied volatility, and time to expiration. As such, the options are classified as Level 2 within the fair value hierarchy. Changes in the fair value of the options are recognized in earnings within Other income, net, classified as nonoperating activity. This presentation is consistent with the treatment of fair value changes related to our Digital assets and related receivables, which are recognized in earnings within "Gain (loss) on digital assets and related receivables," also classified as nonoperating activity.

In connection with the covered-call strategy, the Company pledged 4,709 Bitcoin (the "Pledged Bitcoin") as collateral. As of May 2, 2026, the Pledged Bitcoin remains subject to the Collateral Agreement. Per the terms of the Collateral Agreement, the counterparty maintained the right to rehypothecate, commingle, or unilaterally sell the Pledged Bitcoin, and the Company concluded that control transferred to the counterparty with respect to the Pledged Bitcoin. Accordingly, the Company derecognized the Pledged Bitcoin as an intangible asset and recognized digital assets receivable on its consolidated balance sheets as of May 2, 2026 and January 31, 2026, representing the fair value of its contractual right to receive equivalent Bitcoin in the future. The Digital assets receivable is due within the next 12 months, and accordingly is classified as a Current asset.

The Digital assets receivable is remeasured at fair value at each reporting date in accordance with ASC 820. The receivable's fair value is determined using Level 2 inputs, specifically the unadjusted quoted prices in active markets for the underlying crypto asset (Bitcoin). While the value of the receivable is directly derived from the market price of Bitcoin, the receivable itself is not a traded instrument, therefore, it is classified within Level 2 of the fair value hierarchy. Changes in the fair value of the Digital assets receivable are recognized within Gain on digital assets and related receivables in the condensed consolidated statements of operations and are presented as nonoperating activity.

The following table presents the Company's digital asset holdings as of May 2, 2026:

(1) Actual Bitcoin quantity held; not in millions.

The Company recorded a gain of $1.1 million on Digital assets and related receivables during the three months ended May 2, 2026. The Company did not purchase or sell any Bitcoin during the first quarter of fiscal 2026.

12. Income Taxes

Our interim tax provision was determined using an estimated annual effective tax rate ("AETR") applied to ordinary pre-tax income, adjusted for the tax effects of discrete items recognized during the three months ended May 2, 2026.

We recognized income tax expense of$116.8 millionfor the three months ended May 2, 2026, representing an effective tax rate of 23.1%, compared to income tax expense of $3.5 million, or an effective tax rate of 7.2%, for the three months ended May 3, 2025.

The increase in income tax expense was driven primarily by significantly higher pre-tax income for the three months ended May 2, 2026 The increase in the effective tax rate reflects the recognition of certain tax benefits available during the three months ended May 3, 2025, which reduced income tax expense in that period but were substantially all utilized in fiscal 2025. The difference between our effective tax rate and the U.S. federal statutory rate of 21% is primarily attributable to state income taxes.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the United States. The legislation makes permanent certain expiring provisions of the Tax Cuts and Jobs Act, modifies the U.S. international tax framework, and restores certain favorable business tax provisions. The OBBBA's provisions take effect on various dates between 2025 and 2027. The Company has evaluated the legislation and does not expect it to have a material impact on its estimated fiscal 2026 effective tax rate. The Company will continue to monitor implementing guidance and regulations.

13. Related Party Transactions

One of the Company's directors, Nat Turner, also serves as the Chairman and Chief Executive Officer of Collectors Holdings, Inc. ("Collectors"), the parent company of Professional Sports Authenticator ("PSA"). As a result, Collectors and PSA are considered related parties under ASC 850, Related Party Disclosures.

During the third quarter of fiscal 2024, the Company announced that it had entered into a collaboration with Collectors through its PSA division. Under this arrangement, the Company became an authorized PSA dealer, and PSA provides authentication and grading services for trading cards through select GameStop stores across the United States.

During the second quarter of fiscal 2025, the Company launched Power Packs, a digital trading card platform developed in collaboration with PSA.

Transactions with Collectors and PSA were not material, individually or in the aggregate, during the first quarters of fiscal 2026 and 2025.

14. Subsequent Events

On May 3, 2026, the Company submitted a non-binding proposal (the “Proposal”) to acquire 100% of the outstanding shares of eBay for $125.00 per share in a combination of cash and stock. On May 12, 2026, eBay rejected the Proposal. Consummation of the Proposal was subject to customary closing conditions, including approval by the shareholders of both the Company and eBay, as well as the receipt of required antitrust approvals. There can be no assurance that the Company will enter into a binding agreement with respect to an acquisition of Ebay, on terms favorable to the Company, or at all.

On May 4, 2026, the Company filed a Schedule 13D with the Securities and Exchange Commission reporting its combined beneficial ownership of, and economic exposure to, eBay, consisting of direct beneficial ownership of 25,000 shares of eBay Common Stock and derivative exposure to 22,176,000 additional shares through a series of American-style put and call option transactions expiring February 23, 2028 (as further described in Note 10).

On May 19, 2026, the Company filed Amendment No. 1 to the Schedule 13D, reflecting an increase in its derivative exposure to 29,078,699 shares of eBay Common Stock.

On May 28, 2026, the Company filed Amendment No. 2 to the Schedule 13D, reflecting a further increase in its derivative exposure to 34,508,990 shares of eBay Common Stock.

On June 5, 2026, the Company filed Amendment No. 3 to the Schedule 13D (the “Amendment No. 3”) disclosing (i) the acquisition of additional eBay Common Stock and Put/Call Pairs and (ii) that the HSR Act Condition was satisfied on June 3, 2026, and as a result, the Company (in the case of the call portion of the Put/Call Pairs) and the financial institution counterparty (in the case of the put portion of the Put/Call Pairs) electing to settle the Put/Call Pairs now have the option, but not the obligation, to elect for physical settlement of the shares of eBay Common Stock underlying such Put/Call Pairs in lieu of cash settlement. Thus, as further reported in Amendment No. 3, the Company may be deemed, as of June 5, 2026, to beneficially own 39,874,306 shares of eBay Common Stock, consisting of 827,648 shares of eBay Common Stock owned directly by the Company and a further 39,046,658 shares of eBay Common Stock underlying the Put/Call Pairs. The Company does not have voting power or dispositive power with respect to the 39,046,658 shares of eBay Common Stock underlying the Put/Call Pairs unless and until such Put/Call Pairs are physically settled for shares of eBay Common Stock.

On June 2, 2026, the Company issued a press release announcing that the Company's Board of Directors has approved a new discretionary $2.0 billion share repurchase authorization to replace the previous share repurchase authorization. Under the new share repurchase authorization, the Company may repurchase shares of its Class A common stock from time to time in compliance with SEC regulations and other legal requirements, and subject to market conditions and other factors. The repurchase authorization does not require the Company to acquire any specific number of shares and may be terminated at any time.