ARKO Corp. (ARKO)

ARKO Petroleum, the fuel wholesaler listed as APC in which ARKO holds a controlling stake, reported third-quarter 2026 results on 4 November, with net income of $13.3 million against $10.1 million a year earlier 1.

APC raised its full-year 2026 adjusted EBITDA guidance to a range of $156 million to $157 million 1. The company's adjusted EBITDA starts from earnings before interest, taxes, depreciation and amortization and then excludes items such as impairment charges and share-based pay 2.

ARKO owns 75.9 percent of the economic interests in APC and 94.0 percent of its voting power, and it reports APC's businesses as its own segments 3.

ARKO's own third-quarter results are due on 5 November, with a call at 9:00 Eastern Time in the morning 5.

In the second quarter, ARKO reported net income of $9.4 million against $20.1 million a year before, and adjusted EBITDA of $72.0 million against $76.9 million 2.

The company said higher credit card fees, driven by higher fuel prices, outweighed gains from converting stores to dealer locations 2. The prior-year quarter also held a non-cash gain of $20.8 million from a sale-leaseback 2.

On 4 August, APC agreed to buy the business of U.S. Petroleum Partners for $205 million in cash plus inventory 4. The company expects the deal to close in the fourth quarter of 2026 1.

ARKO Corp. was set up in Delaware on 26 August 2020 to combine Haymaker Acquisition Corp. II with ARKO Holdings, a company organized in Israel 3.

Its operating business, GPM Investments, was formed in 2002 3. The company grew by buying other chains, from 320 sites in 2011 to 3,034 sites at the end of 2021 after 20 acquisitions from 2013 through 2021 9.

In October 2020 it bought the business of Empire Petroleum Partners, which added 84 retail sites and 1,453 wholesale sites 9. In 2021 it bought 60 ExpressStop stores in May and 36 Handy Mart stores in November 9.

Those deals and higher fuel prices drove revenue up fast 9. Fuel revenue rose 133 percent in 2021 9. It rose a further 29.5 percent in 2022, mainly because fuel prices climbed 10.

In March 2023 the company bought 135 stores, 181 dealer locations and a commercial fuel business from Transit Energy Group 3. In June 2023 it bought 24 Uncle's stores plus 68 proprietary and 43 private cardlock sites from WTG Fuels 3.

Revenue peaked at $9.4 billion in 2023, then fell to $8.7 billion in 2024 and $7.6 billion in 2025 3.

The decline came from lower fuel prices and fewer gallons sold in 2025 compared with 2024, and from merchandise sales lost at stores that were closed or converted 3.

Behind it sat a deliberate change 3. Since the second half of 2024 the company has run a Transformation Plan that turns company-run stores into dealer locations it supplies with fuel 3.

The filing says dealers earn the company more through fuel supply and rent than running the store itself 3. It converted 256 stores in 2025 and 409 since mid-2024, adding about $11.8 million of operating income before general costs in 2025 3.

Net income stayed small, at $22.7 million in 2025 and $20.8 million in 2024 3.

In February 2026 APC, the wholesale and fleet fueling arm, completed an initial public offering of 11,111,111 Class A shares on Nasdaq, and ARKO kept 35,000,000 Class B shares 11.

Retail stores and merchandise

ARKO operated 1,118 convenience stores at the end of 2025 under more than 25 regional brands, such as E-Z Mart, Village Pantry, Scotchman and Uncle's 3. Stores sell fuel, packaged drinks, candy, snacks, beer, tobacco and prepared food 3.

In 2025 fuel brought in $6.04 billion of $7.64 billion in revenue, and merchandise $1.48 billion 3. Merchandise margin, the share of a sale left after the goods cost, was 33.7 percent 3.

Food is the push 3. About 965 stores serve food, and the new fas craves format, launched in June 2025, rebuilds stores around grab-and-go food and drinks 3. About 2.4 million customers belong to the fas REWARDS loyalty program 3.

Demand is soft 2. In the second quarter merchandise margin rose to 34.7 percent from 33.6 percent, while the chief executive said higher fuel prices pressured household budgets 2. The retail segment ended June with 1,057 sites 2.

Wholesale and fleet fueling

The wholesale arm supplies fuel to independent dealers 3. On a fuel supply contract the dealer buys fuel at the company's cost plus a fixed margin 3. On a consignment contract the company owns the fuel until the dealer sells it 3.

It had 1,801 fuel supply sites and 298 consignment sites at the end of 2025, and sold 989.1 million gallons for about $2.8 billion of revenue 3.

Fleet fueling runs unstaffed fuel sites for commercial and municipal customers 3. Diesel is about 80 percent of its sales, which were $483.8 million on 142.8 million gallons in 2025 3.

A fourth segment, GPMP, sells fuel to nearly all of the company's fuel sites at cost plus a fixed margin of 5.0 cents a gallon through 2025 and 6.0 cents after 3.

In the third quarter 17 more ARKO stores became dealer locations, 488 in all since 2024 1.

People and rivals

Arie Kotler is chairman, president and chief executive officer 2. The company employed 9,748 people at the end of 2025, 8,438 of them in stores 3.

The 10-K names rivals such as 7-Eleven/Speedway, Circle K, Casey's, Murphy USA, Quik Trip, Royal Farms, Sheetz and Wawa 3. It buys merchandise mainly from Core-Mark and sells branded fuel from Valero, Marathon, BP, Exxon and Shell 3.

Problems and debt

Costs are rising 2. Same-store operating expenses grew 5.6 percent in the second quarter, mainly on credit card fees tied to higher fuel prices, insurance, pay and rent 2.

At 30 June 2026 outstanding debt was about $675 million and net debt about $429 million 2. The company holds $450 million of 5.125% senior notes due 2029 3.

The umbrella, in words

ARKO owns 100 percent of GPM Investments, which runs the retail stores 3. Exhibit 21.1 also lists ARKO Petroleum Corp., GPM Petroleum LP and Israeli entities such as Arko Holdings Ltd. 8.

ARKO owns 75.9 percent of the economic interests in APC, through 35,000,000 Class B shares, and 94.0 percent of the voting power; public holders own the Class A shares 11.

At the end of 2025 it owned 409 properties, including 212 retail stores, and leased 1,585 locations 3.

The proxy lists four holders above 5 percent: Arie Kotler with 20.3 percent, Davidson Kempner affiliates with 20.6 percent, Morris Willner with 8.9 percent and MSD Partners affiliates with 7.2 percent 7.

Kotler's count includes 9,452,636 shares held by KMG Realty LLC, his wholly owned vehicle, and options 7. MSD's count is shares issuable on conversion of the Series A preferred stock 7.

APC expects to close the purchase of U.S. Petroleum Partners in the fourth quarter of 2026 1. The deal includes two fuel terminals in Novi, Michigan and Toledo, Ohio, and the right to supply more than 400 dealer locations 4.

APC says the deal is expected to add about 280 million gallons a year, about 14 percent of its trailing 12-month volume, and about $30 million of annualized adjusted EBITDA 1.

The price is $205 million in cash plus inventory and $30 million of APC Class A shares held in escrow, released only if the business meets EBITDA targets 4.

In its 7 August release ARKO expected full-year adjusted EBITDA of $245 million to $265 million and an average retail fuel margin of 45.5 to 47.5 cents a gallon 2.

ARKO plans about 25 remodels with fas craves food and drink elements 2. APC opened five fleet fueling locations in the first nine months of 2026, added two in October and has 16 more in planning 1.

APC expects ARKO to be largely finished converting stores by the end of 2027, with about 55 more sites committed or already converted since quarter end 1.