GameStop Corp. (NYSE:GME) stock is powering higher on Thursday, capitalizing on a wave of momentum following the company’s Tuesday post-market release of its most profitable quarter in company history.

Traders are driving volume higher after the retailer delivered a first-quarter double beat and announced a massive capital return program.

• GameStop shares are climbing with conviction. Why are GME shares rallying?

Record Net Income and Revenue Beat

For the first quarter, GameStop reported revenue of $835.3 million, beating the consensus estimate of $766.64 million. The company posted earnings per share of 30 cents, outperforming the consensus estimate of 16 cents.

Net income reached a record $389.6 million, marking the highest quarterly net income in company history. Operating income totaled $143.3 million.

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The $2 Billion Share Buyback Boost

Adding fuel to Thursday’s rally, GameStop announced that its board of directors unanimously approved a fresh $2 billion discretionary share repurchase authorization running through June 2, 2029. This massive capital allocation strategy replaces the previous program from March 2019.

Collectibles Overtake Core Video Games

GameStop's collectibles segment grew 65% year-over-year to $348.9 million, overtaking hardware to become the largest revenue line at 41.8% of total sales.

Cash Pile and The eBay Derivative Windfall

According to SEC filings, GameStop holds economic exposure to roughly 29 million eBay Inc. (NASDAQ:EBAY) shares through American-style Put/Call Pairs expiring Feb. 23, 2028. A $268.4 million unrealized gain on these derivatives accounted for more than two-thirds of the record net income.

Furthermore, GameStop ended the quarter with $9.7 billion in total cash, digital assets and marketable securities, allowing it to collect hundreds of millions in annualized interest income.

GameStop Stock Short Interest Report

Short interest in GameStop decreased during the last reporting period, falling from 59.37 million to 57.94 million. This put 14.15% of the company’s publicly available shares short.

Based on the recent average volume of 13.91 million shares traded per day, it would take 4.16 days for holders of this short interest to close out their positions without sending the stock sharply higher.

GME Stock Price Activity: GameStop shares were up 2.89% at $22.79 at the time of publication on Thursday, according to Benzinga Pro data.

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