GameStop Posts Record $389.6 Million Q1 Net Income as Collectibles Overtake Hardware, but an eBay Options Gain Inflates the Headline

Overview

GameStop reported the highest quarterly net income in its history for the first quarter of fiscal 2026, posting net income of $389.6 million for the quarter ended May 2, 2026, according to the company’s earnings release. Net sales grew 14% year-over-year, and for the first time the company’s collectibles business generated more revenue than its hardware business. But the headline profit figure is flattered by a large non-cash item: $268.4 million of that net income came from an unrealized gain on options contracts tied to Chairman and Chief Executive Officer Ryan Cohen’s rejected bid to acquire eBay, Tech Times reported.

What We Know

Net sales were $835.3 million for the quarter, compared with $732.4 million in the prior year’s first quarter, the company disclosed. Operating income was $143.3 million, which the company described as the highest first-quarter operating income in its history, compared with an operating loss of $10.8 million a year earlier, Shacknews noted. Net income was $389.6 million, against $44.8 million in the prior-year period.

The composition of sales has shifted markedly. According to the segment breakdown in GameStop’s earnings release, collectibles generated $348.9 million, or 41.8% of total revenue, up from $211.5 million, or 28.9%, a year earlier. Hardware and accessories fell to $333.7 million from $345.3 million, while software dropped to $152.7 million from $175.6 million. Collectibles — which Tech Times described as trading cards, apparel, toys, and pop-culture merchandise — are now the company’s single largest revenue line, overtaking the hardware and accessories category that long defined the retailer.

GameStop’s cost base continued to shrink. Selling, general and administrative expenses were $201.6 million, down from $228.1 million a year earlier, per the earnings release. The company also reported a substantial cash cushion: total cash, cash equivalents, marketable securities, digital assets and related receivables, and collateral pledged for a derivative asset of $9.7 billion at quarter end, of which $8.4 billion was cash, cash equivalents, and marketable securities, compared with $6.4 billion a year earlier.

On June 2, 2026, GameStop’s board of directors unanimously approved a discretionary $2.0 billion share repurchase authorization running through June 2, 2029, replacing a prior authorization from March 2019, according to the earnings release.

The eBay Wrinkle

The record net income is inseparable from GameStop’s pursuit of eBay. As Tech Times reported, $268.4 million of the quarter’s net income came from an unrealized gain on options contracts tied to Cohen’s board-rejected attempt to acquire eBay, and the company’s economic exposure to eBay had risen to approximately 9%.

That bid was formally rebuffed weeks before the earnings release. On May 12, 2026, eBay announced that its board had determined to reject GameStop’s unsolicited, non-binding acquisition proposal, according to eBay’s own statement. In a response letter addressed to Cohen, the board wrote, “We have concluded that your proposal is neither credible nor attractive.” The letter was signed by Paul S. Pressler, Chairman of the Board of Directors at eBay.

Stripping out the unrealized gain and other discrete items, GameStop’s adjusted net income was $179.3 million for the quarter, compared with $73.1 million a year earlier, per the earnings release. Tech Times characterized that adjusted figure as “a strong number on its own, one that reflects a genuine improvement in the underlying retail business.”

What We Don’t Know

The earnings materials do not break out how much of the collectibles surge is recurring versus driven by one-off trading-card demand, nor do they disclose comparable-store sales. The unrealized eBay options gain is, by definition, a paper figure that can reverse as eBay’s share price and the value of the derivative positions move, so the durability of the headline profit is contingent on factors outside GameStop’s core operations. Tech Times reported that GameStop shuttered hundreds of locations in early 2026 following 590 closures in fiscal 2025, but the filing reviewed here does not detail the current store count.

Analysis

The quarter crystallizes a transformation that has been underway for years: GameStop is no longer primarily a seller of games and consoles. With collectibles at 41.8% of revenue and hardware and software both declining year-over-year, the company’s growth now rests on trading cards and pop-culture merchandise rather than the new-release game sales that built the chain. The $143.3 million operating income — its highest-ever first quarter on that measure — and the sharp reduction in SG&A suggest the underlying retail turnaround is real, not merely an artifact of the eBay options.

Yet the gap between the $389.6 million GAAP net income and the $179.3 million adjusted figure is the story investors will scrutinize. More than two-thirds of a billion-dollar swing in reported profit traces to a single non-operating position connected to a takeover that eBay’s board called neither credible nor attractive. For a company that now sits on $9.7 billion in cash and securities and has just authorized a $2.0 billion buyback, the operating results matter; but the headline number this quarter says as much about Cohen’s capital-allocation bets as it does about the retail floor.