ARKO Petroleum Corp. — Second Quarter 2026 Earnings Summary

Financial Performance

• Net income for the quarter increased to $12.2 million compared to $10.0 million in the prior year period.
• Adjusted EBITDA for the quarter increased to $39.8 million compared to $38.3 million in the prior year period.
• Net cash provided by operating activities for the quarter was $10.4 million compared to $23.2 million in the prior year period.
• Discretionary Cash Flow for the quarter was $27.1 million compared to $24.2 million in the prior year period.
• Total debt, net was $184.7 million and Net Debt was $324.2 million as of June 30, 2026.
• Total liquidity was approximately $724 million, consisting of $15 million in cash and cash equivalents and $709 million in availability under lines of credit.
• Total revenues for the quarter were $1,838.6 million compared to $1,443.4 million in the prior year period.
• Operating income for the quarter was $23.5 million compared to $23.8 million in the prior year period.
• Fuel revenue was $1,098.9 million compared to $820.9 million in the prior year period.
• Fuel costs were $1,054.8 million compared to $776.8 million in the prior year period.
• Site operating expenses were $28.8 million compared to $25.4 million in the prior year period.
• General and administrative expenses were $11.8 million compared to $10.4 million in the prior year period.
• Depreciation and amortization was $14.7 million compared to $13.3 million in the prior year period.
• Interest and other financial expenses were $7.4 million compared to $10.4 million in the prior year period.
• Income tax expense was $4.1 million compared to $3.4 million in the prior year period.
• Net income per share (diluted) was $0.26 compared to $0.29 in the prior year period.
• Weighted average diluted shares outstanding were 47.6 million compared to 35.0 million in the prior year period.

Guidance and Future Outlook

• The Company reaffirmed its full-year 2026 guidance, expecting Adjusted EBITDA to be approximately $156 million and Discretionary Cash Flow to be approximately $110 million.
• The Company expects to complete the conversion of approximately 70 additional ARKO Retail Sites to dealer locations throughout 2026 and into 2027.
• The Company is targeting the opening of 20 new fleet fueling locations in 2026.

Business Segments and Product Lines

• Wholesale Segment:
  • Operating income increased by $1.6 million compared to the prior year period.
  • Fuel contribution increased by $0.9 million compared to the prior year period.
  • Fuel margin at fuel supply locations increased to 7.6 cents per gallon from 6.3 cents per gallon in the prior year period.
  • Fuel margin at consignment agent locations decreased to 29.1 cents per gallon from 30.6 cents per gallon in the prior year period.
  • Other revenues, net increased by $4.5 million and site operating expenses increased by $4.2 million compared to the prior year period.
  • Number of sites increased from 2,014 to 2,129 during the quarter.
• Fleet Fueling Segment:
  • Fuel contribution decreased by $0.7 million compared to the prior year period.
  • Fuel margin at proprietary cardlock locations decreased to 51.2 cents per gallon from 51.7 cents per gallon in the prior year period.
  • Fuel margin at third-party cardlock locations decreased to 9.0 cents per gallon from 21.2 cents per gallon in the prior year period.
  • Number of sites decreased from 287 to 290 during the quarter.
• GPMP Segment:
  • Fuel revenue from related party increased by $111.9 million (18.5%) compared to the prior year period.
  • Fuel contribution from related party increased by $0.2 million compared to the prior year period.
  • Fuel margin at related party locations increased to 6.0 cents per gallon from 5.0 cents per gallon in the prior year period.
  • Number of related party sites decreased from 1,226 to 1,034 during the quarter.
• Strategic Acquisition:
  • Entered into an agreement to acquire U.S. Petroleum Partners, LLC ("USPP"), a vertically integrated fuel supply and distribution platform in the Great Lakes region.
  • The acquisition is expected to increase annual fuel volumes by approximately 280 million gallons (14% on a trailing twelve-months basis).
  • The acquisition adds more than 400 dealer locations, two fuel terminals, and expanded transportation capabilities.
  • The transaction is expected to be accretive and add approximately $30 million of annual Adjusted EBITDA.
  • Consideration includes approximately $205 million in cash plus inventory costs, plus $30 million in Class A common stock held in escrow subject to EBITDA targets.
• Site Conversions:
  • 21 ARKO Retail Sites were converted to dealer locations in the wholesale segment during the quarter.
  • Total conversions since program inception in 2024 reached 471 sites.

Market and Competitive Landscape

• The Company operates in the District of Columbia and more than 30 states across the Mid-Atlantic, Midwestern, Northeastern, Southeastern, and Southwestern United States.
• The Company supplies approximately 2 billion gallons of fuel annually to customers in approximately 3,500 locations.
• The GPMP segment fuel revenue increase was driven by higher average fuel prices, partially offset by a 15.1% decrease in gallons sold due to the challenging macroeconomic environment.
• Margin compression in the Fleet Fueling segment was attributed to indexed prices declining more quickly than the weighted average inventory cost.
• Margin compression in the Wholesale consignment agent segment was attributed to market prices declining more quickly than the weighted average inventory cost.

Risks and Challenges

• The Company faces risks related to changes in economic, business, and market conditions.
• Risks include the ability to successfully integrate acquired businesses, specifically USPP, and achieve expected benefits.
• Potential negative impacts on financial condition if expected benefits from acquisitions are not realized.
• Liabilities of acquired businesses that are not currently known to the Company.
• Challenges in maintaining the listing of Class A common stock on Nasdaq.
• Changes in applicable laws or regulations, including environmental matters.
• The success of ARKO's transformation plan and its effect on the Company, including the dealerization of retail stores.
• Outcome of any known or unknown litigation and regulatory proceedings.

Management Commentary and Tone

• Arie Kotler, Chairman, President and CEO, stated the Company delivered "another quarter of strong execution" highlighted by growth in Adjusted EBITDA and Discretionary Cash Flow.
• Management noted growth in operating income across all three segments, underscoring the resilience of the platform during volatile market conditions.
• Management expressed confidence in the stability of cash flow generation and the ability to deliver on full-year guidance.
• Management described the USPP acquisition as an "important milestone" that expands the predominantly fee-based and fixed-margin earnings profile.
• Management highlighted the Company's strong balance sheet, significant liquidity, and financial flexibility as enabling factors for pursuing strategic opportunities.

Other Key Points

• The Board of Directors declared a quarterly dividend of $0.50 per share of common stock, payable on August 28, 2026, to stockholders of record as of August 18, 2026.
• The declared dividend is consistent with an expected annual dividend rate of $2.00 per share.
• Maintenance capital expenditures for the quarter were $2.7 million and growth capital expenditures were $7.1 million.
• The Company is not currently providing reconciliations of Adjusted EBITDA to net income or Discretionary Cash Flow to net cash provided by operating activities for the full year 2026 due to the unavailability of certain required inputs without unreasonable efforts.
• The Company hosted a conference call on August 6, 2026, to discuss results.