ARKO Corp. — Second Quarter 2026 Earnings Summary

Financial Performance

• Net income for the quarter ended June 30, 2026, was $9.4 million, compared to $20.1 million in the prior year period; net income for the six months ended June 30, 2026, was $3.8 million compared to $7.4 million in the prior year period.
• Adjusted EBITDA for the quarter was $72.0 million, down from $76.9 million in the prior year period; Adjusted EBITDA for the six months ended June 30, 2026, was $122.9 million, a 14.0% increase year-over-year compared to $107.8 million.
• Total revenues for the quarter were $2,346.5 million, up from $1,999.0 million in the prior year period; total revenues for the six months were $4,118.4 million, up from $3,828.4 million.
• Merchandise margin increased 110 basis points to 34.7% in the quarter compared to 33.6% in the prior year period.
• Retail same store fuel margin increased to 48.7 cents per gallon in the quarter compared to 45.7 cents per gallon in the prior year period.
• Retail same store fuel contribution increased approximately 0.5% in the quarter compared to the prior year period.
• As of June 30, 2026, total liquidity was approximately $1.0 billion, consisting of $246 million in cash and cash equivalents and $786 million in availability under lines of credit.
• Outstanding debt was approximately $675 million, resulting in net debt of approximately $429 million after deducting cash and cash equivalents.
• Capital expenditures for the quarter were $33.3 million.

Guidance and Future Outlook

• The Company reaffirmed its full-year 2026 Adjusted EBITDA guidance, expecting a range between $245 million and $265 million.
• The Company increased its outlook for the range of average annual retail fuel margin to between 45.5 cents per gallon and 47.5 cents per gallon.
• The Company is not providing guidance on net income due to the unavailability of certain required inputs, including depreciation and amortization related to capital allocation.

Business Segments and Product Lines

• Retail: Fuel gallons sold decreased 5.7% year-over-year in the quarter; merchandise revenue decreased 13.2% year-over-year to $347.4 million. Same store merchandise contribution decreased $0.6 million year-over-year. The Company converted 21 retail stores to dealer locations during the quarter, bringing the total conversions to 471 since the program began in 2024. One new-to-industry (NTI) retail store was opened, two remodels were completed, and 12 projects were in construction or active development.
• Wholesale: Fuel contribution increased $0.9 million year-over-year in the quarter. Fuel margin per gallon at fuel supply locations increased 1.3 cents to 7.6 cents per gallon. Operating income increased $1.6 million year-over-year. The segment added 13 new sites and converted 21 company-controlled sites to dealer locations during the quarter.
• Fleet Fueling: Fuel contribution decreased $0.7 million year-over-year in the quarter. Fuel margin per gallon at proprietary cardlock locations decreased to 51.2 cents per gallon from 51.7 cents. The segment added one new site and closed two sites during the quarter.
• Acquisition: ARKO Petroleum Corp. announced an agreement to acquire U.S. Petroleum Partners, LLC (USPP), a vertically integrated fuel supply and distribution platform. The acquisition is expected to increase APC's annual fuel volumes by approximately 280 million gallons (14% on a trailing twelve-months basis) by adding more than 400 dealer locations. It is expected to be accretive and add approximately $30 million of annualized Adjusted EBITDA.

Market and Competitive Landscape

• Consumer demand softened during the second quarter as sustained higher fuel prices continued to pressure household budgets.
• Geopolitical environment caused significant volatility in the fuel market, impacting margins.
• The Company operates retail convenience stores under more than 25 regional store brands across the Mid-Atlantic, Midwestern, Northeastern, Southeastern, and Southwestern U.S.
• The Company targets 20 additional new fleet fueling locations in 2026, with one opened in March, two in July, and 17 in progress.

Risks and Challenges

• Higher retail same store operating expenses, primarily driven by a $3.3 million increase in credit card fees due to higher fuel prices, offset benefits from the dealerization program in the quarter.
• Margin compression occurred in the Fleet Fueling segment as indexed prices declined more quickly than the weighted average inventory cost.
• The Company faces risks related to economic conditions, fuel price volatility, and the successful integration of the USPP acquisition.

Management Commentary and Tone

• Arie Kotler, Chairman, President, and CEO, stated the Company delivered a strong first half of 2026 despite weather disruptions and a challenging consumer environment.
• Management emphasized maintaining disciplined fuel and merchandise margins and delivering value for customers.
• The Company expressed confidence in its diversified business model and the strength of its wholesale and fleet fueling segments.
• Management indicated that the USPP acquisition is an important next step to increase scale and enhance supplier economics.

Other Key Points

• The Company repurchased approximately $37.9 million principal amount of its outstanding 5.125% senior notes during the quarter at a discount.
• The Board of Directors declared a quarterly dividend of $0.03 per share of common stock to be paid on August 31, 2026, to stockholders of record as of August 20, 2026.
• The "Fueling America's Future" loyalty initiative delivered more than $4.0 million in customer fuel savings.
• Subsequent to the quarter end, the Company increased one of its PNC lines of credit by $74 million, to an aggregate of $214 million under the two PNC lines of credit.
• The acquisition consideration for USPP will consist of $205 million in cash plus the cost of inventory, plus $30 million in APC Class A common stock held in escrow subject to EBITDA-based financial targets.