ARKO Corp. 10-Q Summary: Period Ended June 30, 2026
Business Context and Reporting Period
This Quarterly Report on Form 10-Q covers the three and six months ended June 30, 2026. ARKO Corp. operates four reportable segments: Retail, Wholesale, Fleet Fueling, and GPMP. A significant corporate development occurred on February 13, 2026, with the completion of the initial public offering (IPO) of ARKO Petroleum Corp. (APC), a subsidiary holding the Wholesale, Fleet Fueling, and GPMP segments. Following the IPO, ARKO Corp. retains a 73.6% economic interest in APC. As of June 30, 2026, the Company operated 1,057 retail convenience stores, supplied fuel to 2,129 dealer locations, and operated 290 cardlock locations.
Key Financial Metrics
| Metric (in thousands, except per share) | Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 |
|---|---|---|
| Total Revenues | $2,346,543 | $4,118,409 |
| Net Income (Consolidated) | $9,432 | $3,839 |
| Net Income Attributable to ARKO Corp. | $6,115 | $(526) |
| Net Income Attributable to Common Stockholders | $4,682 | $(3,377) |
| Diluted EPS (Common Stockholders) | $0.04 | $(0.03) |
| Operating Cash Flow (Six Months) | N/A | $60,880 |
| Adjusted EBITDA | $71,991 | $122,918 |
| Total Debt (Net) | $674,512 | $674,512 |
| Cash and Cash Equivalents | $245,556 | $245,556 |
Material Changes vs. Prior Period
- Revenue Growth: Total revenues increased 17.4% year-over-year for the three months ended June 30, 2026, and 7.6% for the six-month period. This was driven primarily by higher average fuel prices, partially offset by lower fuel volumes sold due to a challenging macroeconomic environment and severe weather in Q1 2026.
- Profitability Decline: Operating income decreased 46.4% to $30.4 million for the quarter and 10.0% to $40.4 million for the six months. The decline was significantly impacted by the absence of a $20.8 million one-time gain recorded in Q2 2025 related to a sale-leaseback transaction.
- Net Loss for Six Months: While the Company reported a net loss attributable to common stockholders of $3.4 million for the six months ended June 30, 2026 (compared to $4.6 million net income in the prior year), this was largely due to the introduction of non-controlling interests (NCI) following the APC IPO. Consolidated net income was $3.8 million.
- Debt Reduction: Total debt decreased from $912.1 million at year-end 2025 to $674.5 million at June 30, 2026. This reduction was achieved by using approximately $206.7 million of APC IPO proceeds to repay indebtedness under the Capital One Line of Credit and repurchasing $37.9 million of Senior Notes.
- Segment Performance:
- Retail: Merchandise revenue declined 13.2% (QoQ) due to store closures/conversions and lower same-store sales. Fuel contribution decreased due to store conversions, though same-store fuel margins improved to 48.7 cents per gallon.
- Wholesale: Operating income increased 7.1% for the quarter, driven by incremental income from retail stores converted to dealer locations.
- Fleet Fueling: Operating income remained relatively flat, with revenue increases offset by margin compression in the second quarter.
Guidance, Outlook, and Risks
- Transformation Plan: The Company continues its multi-year transformation plan, including converting retail stores to dealer locations ("dealerization"). In the first six months of 2026, 62 stores were converted, generating approximately $8.4 million in incremental operating income. The Company plans to continue conversions through 2027.
- Capital Allocation: Capital spending is focused on store remodels (including the "fas craves" format), new-to-industry (NTI) stores, and fleet fueling locations. The Company maintains a strong liquidity position of approximately $1.0 billion, including cash and available credit lines.
- Dividends: The Board declared a quarterly dividend of $0.03 per share of common stock, payable August 31, 2026. APC also declared a quarterly dividend of $0.50 per share.
- Subsequent Event (Acquisition): On August 4, 2026, APC entered into an agreement to acquire substantially all assets of U.S. Petroleum Partners, LLC (USPP) for approximately $205 million in cash and $30 million in APC stock. Closing is expected later in 2026.
- Risks: Key risks include geopolitical tensions affecting fuel prices and supply (specifically in the Middle East), inflation impacting consumer demand and labor costs, and the success of the ongoing transformation and dealerization strategies.
Investor Verification Checklist
- Non-Controlling Interest Impact: Verify the impact of the APC IPO on net income attributable to ARKO Corp. common stockholders versus consolidated net income.
- One-Time Items: Confirm the exclusion of the $20.8 million sale-leaseback gain from Q2 2025 when comparing operating income year-over-year.
- Debt Covenants: Review the amended credit agreements (PNC, M&T, Capital One) post-IPO to ensure compliance with financial covenants given the debt restructuring.
- Store Conversion Metrics: Monitor the rate of retail-to-dealer conversions and the associated incremental operating income to validate the Transformation Plan's efficacy.
- USPP Acquisition: Track the progress of the USPP acquisition, including regulatory approvals and financing terms, as a material subsequent event.