GameStop (GME) Hits Operating Milestone Despite Weakness in Core Sales

On September 8, GameStop Corp. (NYSE: GME ) revealed its second quarter results, delivering an operating income of $160.2 million, which is the highest second-quarter figure in the company's history. On adjusted basis, the company generated $158.7 million in operating income, a sharp surge relative to $64.7 million during Q2 FY25. Looking forward, the management has forecast a full-year FY26 adjusted EBITDA of more than $650 million, compared to its previous guidance exceeding $600 million.

Collectibles Surge Supports Twofold Increase in EBITDA

For the reported quarter, the standout product category was Collectibles, with net sales of $356.3 million. This represented a 57% year-over-year jump, as the category now accounts for 45.1% of total net sales, compared to just 23.4% in 2025. Selling, general and administrative (SG&A) expenses were cut down to $187.1 million, from $218.8 million incurred during the same period last year. This helped quarterly adjusted EBITDA to exhibit more than a twofold increase, from $75.7 million in Q2 FY25 to $174 million in the recent period. Adjusted net income for the quarter also went up from $138.3 million in the second quarter last year to $161.1 million for Q2 FY26.

Subsequent to the quarter, GameStop reduced its long-term debt to approximately $2.8 billion through privately negotiated exchanges completed on September 3 that retired roughly $1.4 billion of its 0.00% Convertible Senior Notes due 2030 and 2032. Moreover, the company's investment holdings also remain strong. As of August 1, it owned around 43.4 million of eBay's common shares, which carry a fair value of around $4.9 billion.

Bears point to an 18.7% year-over-year decline in Net Sales, from $972.2 million in Q2 FY25 to $790.2 million in the recent quarter. The decline can be attributed to several factors, such as last year's launch of Nintendo Switch 2, which creates a stronger base for comparison. Other contributing factors include GameStop's divestiture of its operations in France, and store closures during the quarter.

The company's cash-heavy liquidity position changed significantly during the quarter as the company redeployed capital into its eBay investment. Its cash, equivalents and marketable securities balance stood at $5.1 billion, compared to $8.7 billion by the end of second quarter in 2025. In addition to that, GameStop recorded a $75 million loss on its digital holdings and the related receivables, reflecting the decline in Bitcoin's market price and its exposure through digital assets and related receivables.