ARKO Corp. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net income for the quarter ended September 30, 2026, was $14.3 million, compared to $13.5 million in the prior year period.
• Net income for the nine months ended September 30, 2026, was $18.1 million, compared to $20.9 million in the prior year period.
• Adjusted EBITDA for the quarter was $75.7 million, compared to $75.2 million in the prior year period.
• Adjusted EBITDA for the nine months ended September 30, 2026, increased 8.5% to $198.6 million, compared to $183.0 million in the prior year period.
• Total revenues for the quarter were $2.39 billion, compared to $2.02 billion in the prior year period.
• Total revenues for the nine months ended September 30, 2026, were $6.51 billion, compared to $5.85 billion in the prior year period.
• Merchandise margin increased 110 basis points to 34.8% in the quarter, from 33.7% in the prior year period, marking the 12th consecutive quarter of year-over-year improvement.
• Same store retail fuel margin increased 4.6 cents per gallon to 48.8 cents per gallon in the quarter, from 44.2 cents per gallon in the prior year period.
• Same store fuel contribution increased 2.7% in the quarter compared to the prior year period.
• Retained-store portfolio merchandise sales growth, excluding cigarettes, was 0.8% in the quarter compared to the prior year period.
• Total liquidity as of September 30, 2026, was approximately $1.0 billion, consisting of $184 million in cash and cash equivalents and $845 million in availability under lines of credit.
• Outstanding debt was approximately $625 million, resulting in net debt of approximately $441 million after deducting cash and cash equivalents.
• Capital expenditures were $41.4 million for the third quarter of 2026.

Guidance and Future Outlook:

• The Company raised the lower end of its full year 2026 Adjusted EBITDA guidance to a range of $250 million to $265 million, compared to the previous range of $245 million to $265 million.
• The Company increased its outlook for average annual retail fuel margin to a range of 47.0 cents per gallon to 49.0 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.
• The Company expects to be largely complete with its dealerization program by the end of 2027.
• The USPP acquisition is expected to close during the fourth quarter of fiscal year 2026.

Business Segments and Product Lines:

• Retail:
  • Fuel gallons sold for the quarter were 205.6 million, a decrease from 238.6 million in the prior year period.
  • Same store fuel gallons sold decreased 7.0% in the quarter.
  • Merchandise revenue for the quarter was $351.0 million, compared to $390.0 million in the prior year period.
  • Same store merchandise sales decreased 1.4% in the quarter.
  • Same store merchandise contribution increased by $0.1 million in the quarter compared to the prior year period.
  • 17 retail stores were converted to dealer locations during the quarter, bringing total conversions to 488 since the program began in 2024.
  • Approximately 55 additional sites are committed under letter of intent, under contract, or already converted since quarter end.
  • The Company opened three new-to-industry (NTI) retail stores in the first nine months of 2026 and plans to open four NTI Dunkin' stores between now and early 2027.
  • 11 of the expected 25+ store remodels for 2026 were completed to date.
• Wholesale:
  • Fuel contribution for the quarter was $26.7 million ($15.3 million from fuel supply locations and $11.4 million from consignment agent locations), an increase of $1.7 million compared to the prior year period.
  • Fuel margin per gallon at fuel supply locations increased 0.9 cents to 7.2 cents per gallon.
  • Fuel margin per gallon at consignment agent locations increased 2.8 cents to 30.5 cents per gallon.
  • Wholesale operating income increased by $1.7 million compared to the prior year period.
  • The segment added 6 newly opened or reopened sites and 17 sites converted from retail to dealer locations in the quarter.
• Fleet Fueling:
  • Fuel contribution for the quarter was $17.6 million ($16.8 million from proprietary cardlock locations and $0.8 million from third-party cardlock locations), an increase of $0.9 million compared to the prior year period.
  • Fuel margin per gallon at proprietary cardlock locations increased to 51.6 cents per gallon from 48.9 cents per gallon.
  • Fuel margin per gallon at third-party cardlock locations increased to 21.5 cents per gallon from 15.3 cents per gallon.
  • The Company opened five new fleet fueling locations in the first nine months of 2026 and two locations in October 2026.
  • 16 additional locations are in various stages of planning and development.

Market and Competitive Landscape:

• Significant volatility in the fuel market due to the geopolitical environment contributed to increased fuel margins and contribution.
• The USPP acquisition is expected to add approximately 280 million gallons of annual fuel volume, representing an approximately 14% increase to APC's trailing 12-month fuel volume.
• The USPP acquisition includes approximately 400 dealer locations and two fuel terminals.

Risks and Challenges:

• The press release notes forward-looking statements are subject to uncertainty, including changes in economic, business, and market conditions; the ability to successfully integrate acquired businesses; and the potential negative impact if expected benefits from acquisitions are not realized.
• Risks include liabilities of acquired businesses not known to the Company, changes in applicable laws or regulations, and the outcome of litigation and regulatory proceedings.
• The Company is unable to provide net income guidance due to the unavailability of certain required inputs without unreasonable efforts.

Management Commentary and Tone:

• Arie Kotler, Chairman, President and CEO, stated the Company delivered solid third-quarter results and continued to make meaningful progress transforming ARKO into a more focused, resilient, and cash-generative business.
• Management highlighted that the retained-store portfolio generated positive merchandise sales, excluding cigarettes, for each quarter in 2026.
• Management expressed confidence in the retail transformation and investments in the core company-operated portfolio.
• Management noted that the diversified platform continues to perform well, with wholesale and fleet fueling delivering solid results.
• Management believes the combination of retail transformation progress, disciplined capital allocation, and APC's growth positions ARKO to generate stronger and more durable cash flow over time.

Other Key Points:

• The Company repurchased $62.1 million principal amount of its outstanding 5.125% senior notes for $56.8 million during the quarter.
• The Board declared a quarterly dividend of $0.03 per share of common stock to be paid on December 3, 2026, to stockholders of record as of November 20, 2026.
• On August 4, 2026, ARKO Petroleum Corp. (APC) entered into an asset purchase agreement to acquire the business of U.S. Petroleum Partners, LLC (USPP).
• The USPP acquisition consideration will consist of $205 million in cash plus the value of inventory at closing, plus $30 million in APC Class A common stock held in escrow subject to EBITDA targets.
• The USPP acquisition is expected to be accretive, contributing approximately $30 million of annualized Adjusted EBITDA.
• The Company has an aggregate of approximately 55 additional sites committed under letter of intent, under contract, or already converted since quarter end.
• The Company opened three NTI retail stores in the first nine months of 2026.
• The Company expects to complete more than 25 store remodels in 2026.