1Q25 Revenue: $732.4M, -16.9% YoY, miss estimates by $21.83M
1Q25 Non-GAAP EPS: $0.17, beat estimates by $0.13
FY25 Guidance: No guidance provided.
Comment: GameStop reported a 17% YoY decline in first-quarter revenue to US$732.4mn, as the continued consumer shift toward digital downloads, game streaming, and online shopping eroded sales at its brick-and-mortar stores. Despite efforts to grow its e-commerce platform, the company has struggled to fully capture digital market share. Hardware and accessories revenue dropped by about 32%, and store closures accelerated, with plans to shut a significant number of additional locations in 2025. However, cost-cutting measures helped GameStop return to a net profit of US$44.8mn, reversing a loss from the prior year. The company also exited its Canadian business and is in the process of divesting its French operations, while initiating a surprising move into bitcoin as a treasury reserve asset. Looking ahead, GameStop’s ongoing shift toward a leaner, more digitally focused business model, alongside its strategic divestitures and adoption of alternative assets like bitcoin, positions the company to navigate a challenging retail environment. However, sustained profitability will depend on its ability to grow its digital offerings and adapt to evolving consumer behaviours in the fast-changing gaming landscape. 2Q25recommended trading range: $25 to $35. Neutral Outlook.
1Q26 Revenue: $214.51M, +26.8% YoY, beat estimates by $1.3M
1Q26 Non-GAAP EPS: $0.17, beat estimates by $0.02
2Q26 Guidance: Expect revenue to be between $226mn-$227mn, midpoint of $226.5mn below consensus of $226.6mn; non-GAAP operating income of $23mn-$24mn and non-GAAP diluted net income per share to be $0.16-$0.17.
FY26 Guidance: Expect revenue to be between $936mn-$942mn, midpoint of $939mn below consensus of $969.7mn; non-GAAP operating income of $117mn-$121mn and non-GAAP diluted net income per share to be $0.74-$0.75.
Comment: GitLab delivered strong 1Q26 results, underscoring continued momentum from its platform-centric approach, which drove robust revenue growth and year-over-year operating margin expansion. The company reported a dollar-based net retention rate of 122%, while the number of customers generating over $100,000 in annual recurring revenue rose 26% YoY to 1,288. Management reiterated its focus on AI integration, aiming to deliver industry-leading AI-driven capabilities for developers. However, elevated costs during the quarter weighed on profitability, prompting market expectations for greater cost discipline moving forward. Despite the solid quarter, GitLab issued a softer-than-expected revenue outlook for 2Q26 and FY26, suggesting potential demand headwinds amid ongoing macroeconomic uncertainty. 3Q26recommended trading range: $36 to $50. Neutral Outlook.
