GameStop (NYSE: GME) stock surged more than 13% in pre-market trading on Wednesday after the company reported better-than-expected fourth-quarter earnings. The video game retailer also made headlines with the news that its board has unanimously approved an update to its investment policy, adding Bitcoin as a treasury reserve asset.
GameStop reported adjusted earnings per share (EPS) of $0.29 for the quarter ending February 1, 2025, significantly outperforming the analyst consensus of $0.09. However, revenue fell to $1.28 billion, down from $1.79 billion in the same period last year, missing the forecast of $1.5 billion.
While revenue fell short of expectations, GameStop’s announcement of adding Bitcoin as a treasury asset helped soften the blow, as the company joins other corporations exploring cryptocurrency. This decision aligns with recent trends in the financial world, including U.S. President Donald Trump’s executive order earlier this month to establish a strategic Bitcoin reserve. This bold move marks a significant pivot for GameStop as it seeks to diversify its financial strategy.
The video game retailer reported a substantial increase in net income for the quarter, posting $131.3 million—more than double the $63.1 million from the same period a year ago. Management attributed the improved profitability to cost-cutting measures and a focus on higher-margin sales.
Breaking down its business segments, GameStop saw the steepest decline in its hardware and accessories division, which includes gaming consoles and peripherals. This segment’s revenue fell by 33.7% YoY to $725.8 million. Software sales also took a hit, dropping 38.5% to $286.2 million. However, its collectibles segment performed well, with revenue growing 15.8% to $270.6 million.
Looking at the full fiscal year 2024, GameStop (NYSE: GME) reported a net income of $131.3 million on a total revenue of $3.82 billion, compared to a net income of just $6.7 million on a revenue of $5.27 billion in FY 2023.
As of the end of the quarter, GameStop had $4.77 billion in cash and marketable securities, a significant increase from $1.2 billion a year ago. This boost was largely driven by proceeds from stock offerings, providing the company with ample liquidity moving forward.
