GameStop reports Q2 revenue of $972.2 million, slightly up from last year due to hardware sales

GameStop’s second-quarter numbers are out, and they barely moved the needle. The company pulled in $972.2 million in net sales for the quarter ending August 2.

That’s up from $798.3 million last year in the same quarter. The reason? A small lift in hardware sales, enough to tick the total revenue higher, but nothing major.

Still, investors pushed the stock up 4% after hours, riding momentum and memes more than actual operational wins.

This company, still known for the 2021 retail frenzy, posted a net income of $168.6 million, up from $14.8 million a year ago. The massive jump came down to some wild swings in asset values, especially crypto.

GameStop now holds $528.6 million in Bitcoin, up sharply from last year. Total cash, cash equivalents, and marketable securities hit $8.7 billion, compared to just $4.2 billion at the end of Q2 last year.

Cut costs drive operating income turnaround

GameStop slashed its spending in a big way. Selling, general and administrative (SG&A) expenses dropped to $218.8 million, down from $270.8 million last year. That’s a drop of over $50 million. This cost-cutting helped turn things around.

Operating income swung to $66.4 million this quarter, up from a $22 million loss in the same period last year. When excluding impairment and other adjustments, adjusted operating income came in at $64.7 million, compared to an adjusted loss of $31.6 million last year. That shows GameStop leaned hard on cutting fat rather than growing core sales.

The company’s adjusted net income, after removing impairment, unrealized digital asset gains, and other line items, came in at $138.3 million. That’s a massive spike from the $5.2 million adjusted net income posted in Q2 last year. But again, most of that is balance sheet math and crypto exposure.

GameStop leaned into non-GAAP reporting this quarter. They highlighted several adjusted numbers: adjusted SG&A, adjusted operating income, adjusted net income, adjusted EPS, adjusted EBITDA, and free cash flow. All these tweaks remove transformation costs, severance, digital asset gains and losses, impairments, and divestitures.

The company argued that these figures “provide useful information” for investors watching its core operations. Critics say they’re just cleaning up the mess to make the quarter look better. Either way, there’s a huge gap between GAAP and non-GAAP numbers this time.

Capital expenditures were taken out of free cash flow calculations, painting a smoother financial picture. Meanwhile, crypto played a big role in inflating the company’s books. That $528.6 million Bitcoin stash is now a piece of their financial story.

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