Arko Corp.

What they do

Based in Richmond, Virginia, ARKO operates in four segments: retail, wholesale, fleet fueling and GPMP. The retail segment runs convenience stores under more than 25 regional brands, selling fuel and merchandise, and is described as generating a significant portion of revenue and a large proportion of profitability. The wholesale segment supplies fuel to third-party dealers, sub-wholesalers and bulk purchasers on cost-plus or consignment terms, while fleet fueling includes cardlock locations and proprietary fuel cards. Following the February 2026 APC IPO, GPM operates the retail segment and APC operates wholesale, fleet fueling and GPMP.

Revenue drivers

• Retail fuel and merchandise — The retail segment owns fuel and merchandise inventory at its stores and employs store personnel; it is the segment that generates a large proportion of profitability. As of June 30, 2026, ARKO sold fuel at 1,034 retail sites and had roughly 925 stores with foodservice offerings.
• Wholesale fuel supply — Supplies fuel to third-party dealer gas stations, sub-wholesalers and bulk purchasers, earning a fixed mark-up above cost on cost-plus arrangements or sharing gross profit on consignment deals. Dealer locations grew to 2,129 as of June 30, 2026, from 2,099 at year-end 2025.
• Fleet fueling and cardlocks — Operates 290 proprietary and third-party cardlock unstaffed fueling locations as of June 30, 2026, plus a proprietary fuel card network. This is one of the businesses moved into ARKO Petroleum Corp. after the February 2026 IPO.
• GPMP — A reportable segment that charges the retail business a fixed margin or fixed fee for the cost of fuel. The earnings release excludes this fixed fee when reporting fuel costs, fuel contribution and fuel margin per gallon.

Recent performance

Second quarter 2026 net income was $9.4 million versus $20.1 million a year earlier, and first half 2026 net income was $3.8 million versus $7.4 million; the prior-year periods included a $20.8 million non-cash sale-leaseback gain. Second quarter Adjusted EBITDA was $72.0 million versus $76.9 million, as a $3.3 million increase in credit card fees and higher retail same store operating expenses offset dealerization benefits, while first half Adjusted EBITDA rose 14.0% to $122.9 million. Merchandise margin increased 110 basis points to 34.7%, and same store fuel margin rose to 48.7 cents per gallon from 45.7 cents, with fuel contribution up about 0.5%. Quarterly revenue ranged from $1.77 billion in Q1 2026 to $2.35 billion in Q2 2026.

Strategy

ARKO has been executing a multi-year Transformation Plan since the second half of 2024 that converts retail stores to dealer locations to leverage its wholesale fuel distribution position. It converted 21 stores in Q2 2026, bringing total conversions to 471 since the program began. It also completed the February 2026 IPO of subsidiary ARKO Petroleum Corp., which now holds wholesale, fleet fueling and GPMP, and in which ARKO holds 73.6% of economic interests and 93.3% of voting power as of June 30, 2026. Subsequent to quarter end, APC agreed to acquire U.S. Petroleum Partners, LLC, a Great Lakes fuel supply and distribution platform, for $205 million cash plus inventory and $30 million in escrowed APC Class A stock tied to EBITDA targets. The company also invests in remodels, fas craves food and beverage, new-to-industry stores, technology and automated ordering.

Risks

• Macroeconomic and consumer weakness — The 10-K states that inflation, interest rates and unemployment could reduce consumer purchasing power and demand for fuel and convenience store products.
• Tariffs and trade policy — The 10-K notes recent U.S. tariffs and possible reciprocal tariffs could require price increases or alternative sourcing, potentially hurting reputation and results.
• Dealerization execution — ARKO has converted 471 retail stores to dealer locations since 2024, and Q2 2026 results show higher same store operating expenses partly offsetting dealerization benefits.
• Credit card fee volatility — Higher fuel prices drove a $3.3 million increase in credit card fees in Q2 2026, which the company said more than offset incremental dealerization benefits.

Outlook

Management reaffirmed full-year 2026 financial guidance in the second quarter earnings release. It expects the announced U.S. Petroleum Partners acquisition to add approximately 280 million annual gallons, 400-plus dealer locations, and roughly $30 million of annualized Adjusted EBITDA, plus two fuel terminals and expanded transportation. No specific guidance figures were provided in the excerpted material.