Revenue Analysis
Total and Operating Revenue: GME showed a noticeable decrease in operating revenue from $1,793.6 million in Q4 FY2024 to $1,078.3 million in Q3 FY2023, before slightly increasing to $1,163.8 million by Q2 FY2023. The trend suggests volatility and a downward pressure on revenue generation.
Gross Profit: The Gross Profit has also seen a decline, correlating with the revenue trends, from $419.2 million in Q4 FY2024 to $305.9 million by Q2 FY2023. The Gross Profit margins are decreasing which indicates a cost pressure or reduced sales efficiency.
Cost Management
Cost of Revenue: The Cost of Revenue stood at $1,374.4 million in Q4 FY2024 and fluctuated downwards to $857.9 million by Q2 FY2023. This reduction corresponds with the decrease in revenue.
Operating Expense: Operating Expenses were $359.2 million in Q4 FY2024 and moderated slightly to $322.5 million by Q2 FY2023. This represents a proportional decrease with revenue, reflecting potentially effective but not improving cost control measures.
Total Expenses: Following the trend, total expenses reduced from $1,733.6 million in Q4 FY2024 to $1,180.4 million in Q2 FY2023, in line with the other cost management metrics.
Profitability Analysis
EBITDA: EBITDA showed a deep decline from $78.6 million in Q4 FY2024 to negative figures in subsequent quarters, highlighting major profitability challenges.
Operating Income: There has been a notable decline in Operating Income, turning from $60 million in Q4 FY2024 to a loss of $16.6 million by Q2 FY2023, indicating operational inefficiencies.
Pretax Income: The Pretax Income followed a similar negative trend, from $71 million in Q4 FY2024 to a loss of $3.0 million in Q2 FY2023.
Net Income: Correspondingly, Net Income dropped from $63.1 million in Q4 FY2024 to losses in subsequent quarters, highlighting sustained challenges in turning a profit.
Cash Flow Indicators
Reconciled Depreciation: Depreciation costs were recorded at $18.6 million in Q4 FY2024 and moved minimally to $12.6 million by Q2 FY2023.
Interest Expense: This metric slightly reduced from interest incomes of $15.3 million in Q4 FY2024 to $11.6 million by Q2 FY2023.
Taxation
Tax Rate: The tax rate fluctuated, with a low of 0.111 in Q4 FY2024, but overall, it did not correlate directly with income, given the operating losses in later quarters.
Tax Provision: The tax provision varied, from $7.9 million in Q4 FY2024 to a provision benefit of $200,000 by Q2 FY2023 due to the losses incurred.
Tax Effect of Unusual Items: It was significantly higher at -$534,084 in Q4 FY2024 decreasing to zero in subsequent quarters with less impact from unusual items.
Shareholder Metrics
Diluted and Basic EPS: Earnings Per Share for both diluted and basic decreased from non-disclosed in Q4 FY2024 to -$0.01 by Q2 FY2023.
Average Shares: The average shares stayed fairly constant around 305 million across observed quarters.
Net Income Available to Common Stockholders: This metric followed the net income trends, rising in Q4 FY2024 but turning negative thereafter.
Conclusion
GME’s financials over the past three quarters reveal significant challenges in maintaining profitability, managing costs and ensuring revenue growth. The fluctuating yet generally negative profitability indices, alongside unstable revenue streams, suggest that strategic reassessment and perhaps restructuring may be crucial for future stability and growth.