GameStop Corp (NYSE:GME) shares climbed 6% in after-hours trading on Tuesday after the company reported second-quarter results that comfortably beat Wall Street forecasts.
Revenue rose nearly 22% year-on-year to $972.2 million, well ahead of analysts’ expectations of $823.2 million.
Adjusted earnings came in at $0.25 per share, 61% higher than consensus forecasts.
The company also posted a sharp improvement in profitability, with adjusted EBITDA of $75.7 million and a free cash flow margin of 11.7%.
Operating margins turned positive at 6.8%, up from a loss of 3.6% in the same period last year, reflecting tighter cost control and better cash conversion.
The results mark a rare bright spot for the video game retailer, which has faced long-term sales declines as the gaming industry shifts toward digital downloads.
While revenue is still expected to fall over the coming year, GameStop’s improved cash generation suggests a leaner, more efficient business is taking shape.