ARKO Q2 2026 Earnings: Revenue Rose 17% as Adjusted EBITDA Fell

ARKO Corp. (Nasdaq: ARKO) reported Q2 2026 revenue of $2.35 billion, up about 17.4% from $2.00 billion a year earlier, while diluted EPS fell to $0.04 from $0.16. Net income declined to $9.4 million from $20.1 million, and adjusted EBITDA fell to $72.0 million from $76.9 million as higher same-store expenses and softer consumer demand outweighed benefits from dealerization. Higher merchandise and same-store fuel margins provided a partial offset, but lower retail volumes and fewer company-operated stores constrained contribution.

Core results

The results, released on August 7, cover the quarter ended June 30, 2026. Consolidated fuel revenue increased 25.3% to $1.97 billion amid higher fuel prices, while merchandise revenue declined 13.2% to $347.4 million as ARKO closed stores or converted them to dealer locations.

The GAAP profit comparison was affected by a $20.8 million non-cash sale-leaseback gain recorded in Q2 2025. On an adjusted basis, EBITDA declined more modestly because increased same-store operating expenses—including a $3.3 million increase in credit card fees associated with higher fuel prices—more than offset incremental dealerization benefits.

The difference between consolidated net income and income attributable to ARKO reflects $3.3 million of net income allocated to non-controlling interests following the initial public offering of subsidiary ARKO Petroleum Corp. in February 2026.

Business and segment performance

Dealerization remained the main structural change across ARKO’s segments. The company converted 21 retail stores to dealer locations during the quarter, bringing cumulative conversions since the program began in 2024 to 471. Retail sites declined to 1,057 from 1,254 a year earlier, while wholesale sites increased to 2,129 from 2,014.

Retail margins improved, but volumes and contribution declined

Retail segment revenue increased about 5.5% to $1.23 billion because higher fuel revenue offset lower merchandise revenue. Operating income nevertheless fell to $72.9 million from $80.4 million.

Retail fuel gallons sold declined about 14.8% to 204.8 million, largely reflecting the smaller company-operated store base. Same-store fuel gallons fell 5.7%, but same-store fuel margin increased to 48.7 cents per gallon from 45.7 cents, allowing same-store fuel contribution to rise about 0.5%. Total retail fuel contribution still declined 7.8% to $99.5 million because of stores that were closed or converted.

Merchandise contribution fell 10.4% to $120.5 million, with the entire $14.0 million decline attributed primarily to closed or converted stores. Same-store merchandise sales decreased 1.7%, or 0.9% excluding cigarettes, as management cited a more challenging consumer environment. Merchandise margin improved by 110 basis points to 34.7% through pricing, product mix and vendor-supported promotions.

Total retail site operating expenses declined by $16.6 million as dealerization removed costs from the retail segment. However, same-store operating expenses rose 5.6%, reflecting higher credit card fees, insurance, personnel costs and rent.

Dealer conversions supported wholesale income

Wholesale revenue increased about 32.0% to $935.1 million, while operating income rose $1.6 million to $24.9 million. Incremental profit from converted retail locations more than offset weaker results at comparable wholesale sites.

Fuel contribution at supply locations increased $2.0 million, and margin rose to 7.6 cents per gallon from 6.3 cents, partly because higher fuel costs increased prompt-pay discounts. At consignment agent locations, contribution declined $1.1 million and margin fell to 29.1 cents from 30.6 cents as market prices declined faster than ARKO’s weighted average inventory cost.

Fleet Fueling revenue growth did not translate into contribution growth

Fleet Fueling revenue rose about 48.1% to $178.2 million, but operating income was nearly flat at $13.3 million. Combined fuel contribution declined approximately $0.7 million as margins compressed at both proprietary and third-party cardlock locations. The company attributed the comparison to unusually high prior-year margins and indexed prices declining faster than weighted average inventory costs in Q2 2026.

Profitability, cash flow and balance sheet

Quarterly operating cash flow declined to $42.2 million, while capital expenditures decreased to $33.3 million from $45.3 million. On a simple operating-cash-flow-minus-capex basis, the remaining cash was approximately $8.9 million, compared with about $9.8 million in Q2 2025.

For the first half, operating cash flow was $60.9 million versus $98.6 million a year earlier. Working-capital movements included a $64.4 million use of cash from trade receivables and a $17.8 million use from inventory, partly offset by a $41.2 million increase in accounts payable.

As of June 30, ARKO had approximately $245.6 million of cash and cash equivalents, total liquidity of about $1.0 billion, outstanding debt of approximately $675 million and net debt of about $429 million. During the quarter, it repurchased $37.9 million in principal amount of senior notes at a discount. After quarter-end, ARKO increased one PNC credit line by $74 million, bringing aggregate capacity under its two PNC lines to $214 million.

The board also declared a quarterly dividend of $0.03 per common share, payable on August 31, 2026, to shareholders of record on August 20.

USPP acquisition would materially expand APC’s fuel platform

After the quarter ended, ARKO Petroleum Corp. agreed to acquire U.S. Petroleum Partners, a fuel supply and distribution platform serving the Great Lakes region. The transaction has not yet closed, but ARKO expects it to add more than 400 dealer locations and approximately 280 million gallons of annual fuel volume, equivalent to about 14% of APC’s trailing-12-month volume.

The company expects the acquired business to contribute approximately $30 million of annualized adjusted EBITDA. It would also add two fuel terminals and transportation capabilities, potentially expanding APC’s vertical integration and fee-based earnings.

Closing consideration consists of $205 million in cash plus inventory costs. APC will also issue $30 million of Class A common stock into escrow, with release to the seller dependent on the acquired business meeting EBITDA targets during the first four full quarters after closing.

2026 guidance

ARKO reaffirmed its full-year adjusted EBITDA range after first-half adjusted EBITDA increased 14.0% to $122.9 million. It also raised its retail fuel-margin outlook, expecting higher margins to offset lower retail fuel volumes.

ARKO did not provide net income guidance because certain inputs, including depreciation and amortization associated with future capital allocation, were unavailable without unreasonable effort.

Recent insider transactions

The supplied six-month insider data shows 609,992 shares purchased across 10 transactions and 35,000 shares sold across two transactions, resulting in net purchases of 574,992 shares. Among the latest reported records, three contained complete purchase or sale details and one involved a stock grant.

The source labels the final column as “Value” without specifying a unit, so the figures are reproduced as reported. These transactions alone do not establish the insiders’ views on ARKO’s outlook.

Risks investors should watch

• Consumer pressure: Management said higher fuel prices continued to pressure household budgets. Further weakness could reduce same-store merchandise sales and retail fuel volumes.
• Same-store expense growth: Credit card fees, insurance, personnel expenses and rent increased during the quarter. Continued cost growth could offset benefits from better merchandise and fuel margins.
• Dealerization execution: Conversions reduce retail contribution and company-operated revenue before their benefits appear through lower costs and increased wholesale income. The overall result depends on wholesale gains and cost reductions continuing to offset the retail decline.
• Fuel-price and inventory timing: Wholesale consignment and Fleet Fueling margins were pressured when selling-price indexes declined faster than weighted average inventory costs. Similar volatility could continue to affect contribution.
• USPP transaction risk: The acquisition requires substantial cash consideration, and its expected volume, adjusted EBITDA and integration benefits remain dependent on closing and successful execution.

Summary

ARKO’s Q2 revenue growth was driven by higher fuel revenue, but the more important operating picture was mixed: retail volumes and merchandise contribution declined, same-store costs increased, and adjusted EBITDA fell modestly. Better retail margins and increased wholesale income provided offsets, while dealerization continued shifting activity away from company-operated stores. Investors’ next points of focus are the balance between retail margin and volume, the conversion program’s contribution to wholesale earnings, and execution of the proposed USPP acquisition.