GameStop (GME) Q3 Earnings: What Wall Street Really Expects This Tuesday

All eyes turn to Texas as GameStop prepares to drop its quarterly numbers. The meme stock legend faces its latest reality check—and Wall Street's analysts have their scorecards ready.

Beyond the Hype: The Core Metrics That Matter

Forget the social media chatter for a minute. The suits on the Street are laser-focused on a few key figures. Revenue trajectory tops the list—has the digital pivot gained real traction, or is growth stalling? Then comes profitability. Is the cost-cutting narrative holding up, or are margins getting squeezed? Finally, guidance. Any shift in outlook for the crucial holiday quarter will send analysts scrambling to update their models.

The Meme Stock Premium: Still in Play?

Let's be real—GME trades on a different planet than traditional retail metrics. The stock's wild swings often have more to do with online sentiment than same-store sales. This earnings call is a collision of two worlds: the hard numbers of a transforming brick-and-mortar business and the volatile, narrative-driven fuel of its cult following. One cynical take? For some fund managers, parsing GameStop's fundamentals is just performance art—a necessary ritual before returning to trade the volatility everyone actually profits from.

Tuesday's report isn't just a financial update; it's a cultural litmus test. Will the numbers justify the faith, or is this another chapter where the story diverges sharply from the spreadsheet? Tune in to find out which narrative—the turnaround or the fade—gets a fresh dose of rocket fuel.

TLDR

• GameStop reports Q3 earnings Tuesday after market close with analysts expecting $987.4 million in revenue, up 15% year-over-year
• Earnings per share projected at $0.20, more than tripling the $0.06 from last year’s Q3
• Options traders anticipate a 9.51% stock price swing following the earnings announcement
• Hardware sales jumped 31% in Q2 while collectibles surged 63%, becoming the second-largest category
• GameStop ended Q2 with $8.7 billion in cash and $528.6 million in Bitcoin holdings

GameStop reports its fiscal third-quarter earnings Tuesday after the closing bell. Wall Street expects revenue of $987.4 million, marking a 15% increase from the same period last year.

GameStop Corp., GME

The earnings forecast sits at $0.20 per share. That’s more than triple the $0.06 reported in Q3 2024.

The video game retailer has beaten earnings estimates in recent quarters. Over the past year, GameStop has delivered quarterly bottom-line beats of 61% or better.

Options traders are bracing for movement. Based on options pricing, the market expects a 9.51% swing in either direction after earnings drop.

That’s slightly below GameStop’s average post-earnings MOVE of 10.4% over the past three quarters. The stock gained 4.54% over the past five trading sessions but remains down 25% year-to-date.

Business Model Shifts Drive Growth

GameStop’s revenue mix has changed dramatically. Hardware sales climbed 31% in Q2, boosted by Nintendo’s Switch 2 console launch in June.

Collectibles now rank as the second-largest category. The segment exploded 63% higher in the second quarter.

Software sales tell a different story. The category that once drove GameStop’s profits fell 27% in Q2. Software now makes up less than 16% of total revenue.

Digital delivery and game streaming services have eaten into physical disc and cartridge sales. Publishers now reach players directly, cutting GameStop out of the equation.

Revenue Streak Continues

The retailer posted double-digit revenue growth for six straight quarters. This follows years of decline that saw net sales drop 59% from their 2015 peak.

Last quarter, GameStop delivered revenue of $972.2 million. That beat Wall Street’s estimate of $900 million by a wide margin.

GameStop has struggled with growth in recent years. Net sales declined for six of the last seven fiscal years.

Even the one year of positive growth came after pandemic-impacted fiscal 2020. Those fiscal 2021 sales still landed 7% below two years prior.

Analysts project similar 15% growth for the current holiday quarter ending in early February. These gains follow declines of 29%, 31%, and 20% in the last three quarters of fiscal 2024.

The positive growth still leaves revenue below levels from two years ago.

Cash Position Remains Strong

GameStop closed Q2 with $8.7 billion in cash. That’s up from $4.2 billion in the same period last year.

The company also holds Bitcoin worth $528.6 million at the end of fiscal Q2. The stock trades at a P/E ratio of 23 based on this year’s projected earnings.

GameStop is on track for its third consecutive profitable year. The market hasn’t seen that from the retailer since fiscal 2017.

This year also marks back-to-back years of earnings growth. GameStop hasn’t achieved that since fiscal 2015.

Gross margin contracted year-over-year in Q2 as the revenue mix shifted toward lower-margin hardware. But total profits continue to expand as sales volume increases.

The company has missed earnings estimates in only two of the past nine quarters.