ARKO Petroleum Corp.: Form 10-Q for the period ended Mar 31, 2026

You should read this discussion together with the unaudited Condensed Consolidated Financial Statements, related notes, and other financial information included elsewhere in this Quarterly Report on Form 10-Q together with our audited combined financial statements, related notes, and other information contained in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Form 10-K”). The following discussion contains assumptions, estimates and other forward-looking statements that involve a number of risks and uncertainties, including those discussed under “Risk Factors,” in Part I, Item 1A of the Form 10-K and in Part II, Item 1A of this Quarterly Report on Form 10-Q and as described from time to time in our other filings with the Securities and Exchange Commission. These risks could cause our actual results to differ materially from those anticipated in these forward-looking statements.

Overview

ARKO Petroleum Corp. is a growth-oriented, fuel distribution company and one of the largest wholesale fuel distributors by gallons in North America, supplying customers in more than 30 states across the United States (“U.S.”). Based in Richmond, Virginia, ARKO Petroleum Corp. was incorporated under the laws of Delaware on July 2, 2025 as a wholly owned subsidiary of ARKO Corp., a Delaware corporation (“ARKO Parent”), one of the largest convenience store operators in the U.S. and whose common stock is listed on the Nasdaq Stock Market (“Nasdaq”) under the symbol “ARKO.”

On February 13, 2026, we completed our initial public offering issuing 11,111,111 shares of our Class A common stock, par value $0.0001 per share (“Class A common stock”), at a price to the public of $18.00 per share. In connection with the initial public offering, we granted to the underwriters an option for a period of 30 days following the closing of the initial public offering to purchase up to an additional 1,666,666 shares of Class A common stock to cover over-allotments. On March 5, 2026, the underwriters exercised their option to purchase 1,459,112 shares of Class A common stock, and on March 9, 2026, we issued and sold such shares to the underwriters. The foregoing transactions are collectively referred to as our “IPO.” The total net proceeds from our IPO were approximately $206.8 million. Our Class A common stock began trading on Nasdaq under the symbol “APC” on February 12, 2026. ARKO Parent owns 35,000,000 of our Class B common stock, par value $0.0001 per share (“Class B common stock”), representing 73.6% of the economic interests and 93.3% of the combined voting power of the Class A common stock and Class B common stock.

In conjunction with our IPO, ARKO Parent contributed to us all of its wholesale and fleet fueling businesses and the rights to supply fuel to substantially all of ARKO Parent’s retail convenience stores that sell fuel (“ARKO Retail Sites”).

We are engaged in (i) wholesale activity, which includes the supply of fuel to gas stations operated by third-party dealers, (ii) fleet fueling, which includes the operation of proprietary and third-party cardlock locations (unstaffed fueling locations) and the issuance of proprietary fuel cards that provide customers access to a nationwide network of fueling sites, and (iii) the wholesale distribution of fuel to substantially all of the ARKO Retail Sites (together, the “Business”). As of March 31, 2026, we supplied fuel to 2,126 dealer locations and to 1,056 ARKO Retail Sites, and we operated 292 proprietary and third-party cardlock locations. We are well diversified geographically and as of March 31, 2026, operated in the District of Columbia and more than 30 states in the Mid-Atlantic, Midwestern, Northeastern, Southeastern and Southwestern United States.

One of our key business objectives is to make quarterly cash distributions to stockholders and, over time, increase our quarterly cash distribution. We have designed our operating model to be cost-and-capital-efficient based on the following characteristics: (i) the Business requires a limited number of employees; (ii) relatively low operating costs, which generally result in high conversion of gross profit to Adjusted EBITDA and, similarly, an attractive margin profile; and (iii) adding wholesale and cardlock locations is not expected to require substantial incremental corporate overhead, providing an opportunity to scale efficiently. Additionally, our cost-and-capital-efficient operating model, relatively low leverage and stable and growing cash flow profile, are expected to position us to consistently convert a high level of Adjusted EBITDA into Discretionary Cash Flow, enabling us to prioritize the return of capital to stockholders in the form of consistent and growing cash dividends. Adjusted EBITDA and Discretionary Cash Flow are non-GAAP measures. Please see Use of Non-GAAP Measures below for discussion of these non-GAAP performance and liquidity measures and related reconciliation to net income and net cash provided by operating activities, as applicable.

Description of Segments

Our reportable segments are described below.

Wholesale Segment

Our wholesale segment supplies fuel to gas stations operated by third-party dealers, sub-wholesalers, and bulk and spot purchasers on either a cost-plus or consignment basis. For cost plus arrangements, the dealers, sub-wholesalers and bulk and spot purchasers, purchase fuel from us, and we earn a fixed mark-up above our cost. The sales price is determined according to the terms of the relevant agreement, which typically reflects our total fuel costs plus the cost of transportation, taxes and our fixed margin. Furthermore, we generally retain any prompt pay discounts and rebates from our fuel suppliers. For consignment arrangements, we retain ownership of the fuel inventory at the site until the time of sale to the ultimate customer by the dealer, we are responsible for the pricing of the fuel to the end consumer and we share the gross profit generated from the sale of fuel by the dealer based on the terms of the relevant contract. In certain cases, gross profit is split based on a percentage and in others, we pay a fixed fee per gallon to the dealer and retain the remainder of the profit.

Fleet Fueling Segment

Our fleet fueling segment includes the operation of proprietary and third-party cardlock locations (unstaffed fueling locations), and commissions from the sales of fuel using proprietary fuel cards that provide customers access to a nationwide network of fueling sites.

GPMP Segment

Our GPMP segment includes the sale and supply of fuel to substantially all ARKO Retail Sites, at our cost of fuel (including taxes and transportation) plus a fixed margin (through December 31, 2025, 5.0 cents per gallon; 6.0 cents per gallon thereafter), and the GPMP segment charges a fixed fee (through December 31, 2025, 5.0 cents per gallon; 6.0 cents per gallon thereafter) to certain ARKO Retail Sites that are not supplied by us. In addition, the GPMP segment includes the sale of fuel to our locations in the wholesale segment, and beginning February 1, 2026, to our locations in the fleet fueling segment, at our cost of fuel (including taxes and transportation) plus a fixed margin (through December 31, 2025, 5.0 cents per gallon; 6.0 cents per gallon thereafter). Prior to February 1, 2026, the GPMP segment charged a fixed fee (through December 31, 2025, 5.0 cents per gallon; 6.0 cents per gallon thereafter) primarily to fleet fueling locations that were not supplied by the GPMP segment. These inter-segment transactions were eliminated in our results of operations. Through the end of the second quarter of 2025, the GPMP segment also supplied fuel to a limited number of third-party dealers.

Basis of Presentation

The condensed consolidated financial statements (including the related notes thereto, the “interim financial statements”), which are contained elsewhere in this Quarterly Report on Form 10-Q, present our historical financial position, results of operations, changes in equity/net investment and our cash flows in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

We have historically operated as part of ARKO Parent and not as a separate, publicly traded company. The historical interim financial statements for the periods preceding the IPO have been derived from ARKO Parent’s audited and reviewed consolidated financial statements and historical accounting records, carved out of the activity of ARKO Parent and combined. All revenues and costs as well as assets and liabilities directly associated with our Business have been included in the interim financial statements. For the periods preceding the IPO, the interim financial statements also included allocations of certain operating and corporate expenses from ARKO Parent relating to our Company. The allocations have been determined on a reasonable basis; however, the allocations are not necessarily representative of the amounts that would have been reflected in the interim financial statements had we been an entity that operated separately from ARKO Parent during the periods presented. Further, the interim financial statements for the periods preceding the IPO are not reflective of what our results of operations, financial position, equity or cash flows might be in the future as a separate public company.

Immediately prior to our IPO, we entered into a Management Services Agreement with ARKO Parent, whereby ARKO Parent has agreed to provide or cause to be provided certain services to us, which were previously included as part of the allocations from ARKO Parent. As consideration, we agreed to pay ARKO Parent a fee. Related party allocations, including the method for such allocations, are discussed further in Note 12 to the interim financial statements. For example, for the periods preceding the IPO, our interim financial statements include expense allocations for certain support functions that were provided on a centralized basis within ARKO Parent, such as certain ARKO Parent expenses and shared service functions provided by ARKO Parent. Following our IPO, under the Management Services Agreement, ARKO Parent continues to provide us with some of the services related to these functions for an agreed-upon fee, and we incur other costs to replace the services and resources that are not provided by ARKO Parent. We also incur additional costs as a separate public company. Our total costs related to such support functions may differ from the costs that were historically allocated to us from ARKO Parent. These additional costs are primarily for the following:

• additional personnel costs, including salaries, benefits and potential bonuses or stock-based compensation awards for staff, including staff additions to replace support provided by ARKO Parent that is not covered by the Management Services Agreement; and
• corporate governance costs, including director and officer insurance costs, board of director compensation and expenses, audit and other professional services fees, annual report and proxy statement costs, SEC filing fees, transfer agent fees, consulting and legal fees and Nasdaq listing fees.

Certain factors could impact the nature and amount of these separate public company costs, including our staffing and infrastructure needs. We may incur different costs associated with being a standalone public company, which would result in costs that vary from the costs that have been allocated to us in the interim financial statements for the periods preceding the IPO.

Additionally, prior to our IPO, ARKO Parent used a centralized approach to cash management and financing of its operations, except with respect to GPM Petroleum LP, which has had, and continues to have, its own credit facility. See Liquidity and Capital Resources.

Factors Affecting Results of Operations and Comparability

We achieved strong growth over the last decade, driven primarily by a highly successful acquisition strategy, inclusive of 26 completed acquisitions by us and ARKO Parent from 2013 through March 31, 2026. Our strategic acquisitions, as well as the conversion of a meaningful number of ARKO Retail Sites to dealer locations, have had, and may continue to have, a significant impact on our reported results, which can make period to period comparisons difficult.

Starting in the middle of 2024, ARKO Parent commenced a multi-year transformation plan to leverage its unique, multi-segment operating model to expand our wholesale fuel distribution network by converting a meaningful number of ARKO Retail Sites to dealer locations. The conversion of an ARKO Retail Site that had been supplied by the GPMP segment to a dealer location effectively shifts that site to our wholesale segment. In such cases, we realize higher profit from ongoing fuel supply agreements and rental income than from the supply of fuel to these ARKO Retail Sites by the GPMP segment. During the three months ended March 31, 2026, 41 ARKO Retail Sites converted to dealer locations, and a total of 450 ARKO Retail Sites have converted since the beginning of this initiative. We expect that ARKO Parent will continue to convert a meaningful number of additional stores throughout 2026.

We are targeting opening 20 new-to-industry (“NTI”) fleet fueling locations during 2026, of which one opened in March 2026, and 17 of which are in process. We anticipate that these NTI fleet fueling locations will have a positive impact on our results of operations given the attractive, durable cash flow profile of our fleet fueling business.

Our wholesale and fleet fueling businesses and the GPMP segment’s wholesale distribution of fuel to substantially all of the ARKO Retail Sites have provided stable, ratable cash flows that can be deployed to pursue accretive acquisitions and invest in our business, and we believe our significant size and scale aids our efforts to successfully deploy our growth strategies, which we anticipate will result in value accretion. Additionally, we believe our low leverage profile and anticipated cash flows position us to consistently return capital to stockholders through dividends.

The following table provides a history of our acquisitions, site conversions and site closings for the periods noted, for the wholesale, fleet fueling and GPMP segments:

1 Excludes bulk and spot purchasers.

2 Includes all signed fuel supply agreements irrespective of fuel distribution commencement date.

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Trends Impacting Our Business

We believe we have limited exposure to fluctuating commodity prices because we generally pass the cost of the fuel we distribute through to our customers. In addition, we are able to generate larger fuel margins (i) under consignment distribution arrangements with third-party dealers, where we maintain control of the fuel inventory and retail fuel pricing, and (ii) on fuel sales at our cardlock locations, compared to fuel supply arrangements.

The cost of our main products, gasoline and diesel fuel, is greatly impacted by the wholesale cost of fuel in the U.S. The number of fuel gallons we sell and the related fuel margin that we earn per gallon significantly impact our results of operations. Fuel gallons sold are impacted by changes in the number of locations, macroeconomic environment, weather, crude oil pricing and other factors.

Fuel margins for our retail stores, our fleet fueling sites and consignment agent locations can change rapidly because they are influenced by many factors, including: the wholesale cost of fuel; interruptions in supply caused by severe weather; supply chain disruptions; refinery mechanical failures; and competition in the local markets in which we operate. We pass wholesale fuel cost changes to our fuel supply dealers and attempt to pass wholesale fuel cost changes to our retail, fleet fueling and consignment customers through price changes; however, we are not always able to do so. We tend to realize lower fuel margins when the cost of fuel increases gradually over a longer period and higher fuel margins when the cost of fuel declines or is more volatile over a shorter period.

During the quarter ended March 31, 2026, global crude oil and refined product markets were impacted by heightened geopolitical tensions in the Middle East, including the ongoing conflict involving Iran, Israel, and the United States. These developments contributed to volatility in crude oil prices and periodic supply disruptions, particularly related to the disruption of shipping through the Strait of Hormuz. As a result, wholesale fuel costs increased during the period, leading to higher retail gasoline prices and greater price and volume volatility in many of our markets. While retail price increases generally lag behind changes in wholesale costs, the magnitude and timing of the fluctuations during the quarter ended March 31, 2026 positively affected our fuel margins during the quarter.

We continually monitor market conditions and adjust pricing strategies in response to changes in commodity costs, competitive dynamics, and consumer demand. Continued geopolitical uncertainty may result in ongoing volatility in fuel costs and margins in future periods. Because market and geopolitical conditions from time to time constrain the supply of fuel, including diesel fuel in particular, we maintain terminal storage of diesel fuel for short-term supply needs for our fleet fueling sites.

Additionally, the significant increase in the rate of inflation in the U.S. in recent years and the effect of higher prevailing interest rates has reduced consumer purchasing power. The persistence of, or increase in, inflation could negatively impact the demand for our fuel, including due to consumers reducing travel, which could reduce sales volumes.

Seasonality

Our business is seasonal, and our operating income in the second and third quarters has historically been significantly greater than in the first and fourth quarters because of the generally favorable climate and seasonal buying patterns of our customers.

Results of Operations for the three months ended March 31, 2026 and 2025

The period-to-period comparisons of our results of operations contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operation have been prepared using our interim financial statements. The following discussion should be read in conjunction with the interim financial statements. All figures (other than related party) for fuel costs, fuel contribution and fuel margin per gallon exclude the fixed margin or fixed fee paid to the GPMP segment for the cost of fuel, which are intercompany charges by the GPMP segment.

Consolidated Results

The table below shows our consolidated results for the three months ended March 31, 2026 and 2025, together with certain key metrics.

(in thousands)

1 Calculated as fuel revenue less fuel costs.

2 Calculated as fuel contribution divided by fuel gallons sold.

3 Refer to “Use of Non-GAAP Measures” below for discussion of these non-GAAP performance and liquidity measures and related reconciliation to net income and net cash provided by operating activities, as applicable.

Three Months Ended March 31, 2026 versus Three Months Ended March 31, 2025

For the three months ended March 31, 2026, fuel revenue increased by $50.8 million, or 6.7%, compared to the three months ended March 31, 2025. The increase in fuel revenue was attributable primarily to an increase in the average price of fuel compared to the first quarter of 2025 and the contribution of gallons from ARKO Retail Sites converted to dealer locations, which was partially offset by lower gallons sold at comparable wholesale sites and fleet fueling sites in the first quarter of 2026 compared to the first quarter of 2025, due to a challenging macroeconomic environment as well as severe weather conditions in the quarter in several markets in which we operate.

For the three months ended March 31, 2026, fuel revenue – related party decreased by $59.9 million, or 10.4%, compared to the three months ended March 31, 2025, resulting primarily from a 28.9 million, or 13.7%, decrease in gallons sold, reflecting the challenging macroeconomic environment. as well as severe weather conditions in the quarter in several markets in which we operate, and ARKO Retail Sites converted to dealer locations, which was partially offset by an increase in the average price of fuel in the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.

For the three months ended March 31, 2026, other revenues, net increased by $6.1 million, or 47.4%, compared to the three months ended March 31, 2025, primarily due to additional rental income from ARKO Retail Sites that had been converted to dealer locations.

For the three months ended March 31, 2026, other revenues, net – related party were consistent with those in the three months ended March 31, 2025.

For the three months ended March 31, 2026, total operating expenses decreased by $7.1 million, or 0.5%, compared to the three months ended March 31, 2025. Fuel costs increased by $46.9 million or 6.5%, compared to the three months ended March 31, 2025 while fuel costs – related party decreased by $60.3 million, or 10.7%, compared to the three months ended March 31, 2025, both consistent with the corresponding year over year changes in fuel revenues. For the three months ended March 31, 2026, site operating expenses increased by $4.9 million, or 22.3%, as compared to the three months ended March 31, 2025 due to incremental expenses from ARKO Retail Sites converted to dealer locations.

For the three months ended March 31, 2026, general and administrative expenses increased by $0.1 million, or 0.6%, compared to the three months ended March 31, 2025.

For the three months ended March 31, 2026, depreciation and amortization expenses increased by $1.3 million, or 9.5%, compared to the three months ended March 31, 2025, primarily due to assets related to ARKO Retail Sites that had been converted to dealer locations.

For the three months ended March 31, 2026, other expenses, net decreased by $0.1 million compared to the three months ended March 31, 2025.

Operating income was $20.1 million for the three months ended March 31, 2026 compared to $15.8 million for the three months ended March 31, 2025. The increase in operating income was primarily due to the benefit from ARKO Retail Sites that have been converted to dealer locations and greater fuel contribution from comparable wholesale sites and fleet fueling sites, partially offset by an increase in site operating expenses and depreciation and amortization expenses.

For the three months ended March 31, 2026, interest and other financial expenses, net decreased by $0.6 million compared to the three months ended March 31, 2025 primarily due to lower average debt balances, primarily as a result of the use of the net proceeds from the IPO to repay approximately $206.7 million of the indebtedness under our Capital One Line of Credit (as defined below), and lower average interest rates in the first quarter of 2026 as compared to the first quarter of 2025, partially offset by higher interest expenses related to financial liabilities and financing leases related to ARKO Retail Sites converted to dealer locations.

For the three months ended March 31, 2026, income tax expense was $3.0 million compared to $1.7 million for the three months ended March 31, 2025, and the effective tax rate for the three months ended March 31, 2026 and 2025 was 27.1% and 27.0%, respectively.

For the three months ended March 31, 2026, net income was $8.1 million compared to $4.5 million for the three months ended March 31, 2025.

For the three months ended March 31, 2026, Adjusted EBITDA was $36.4 million compared to $30.9 million for the three months ended March 31, 2025. Refer to “Use of Non-GAAP Measures” below for discussion of this non-GAAP performance measure and related reconciliation to net income.

Segment Results

Wholesale Segment

The table below shows the results of the wholesale segment for the three months ended March 31, 2026 and 2025, together with certain key metrics for the segment.

(in thousands)

1 Calculated as fuel revenue less fuel costs; excludes the fixed margin or fixed fee paid to the GPMP segment for the cost of fuel.

2 Calculated as fuel contribution divided by fuel gallons sold.

Note: Information disclosed on a “comparable wholesale sites” basis excludes wholesale sites added through ARKO Retail Sites converted to dealer locations, until the first quarter in which these sites had a full quarter of wholesale activity in the prior year. Refer to “Use of Non-GAAP Measures” below for discussion of this non-GAAP performance measure.

Three Months Ended March 31, 2026 versus Three Months Ended March 31, 2025

Wholesale Revenues

For the three months ended March 31, 2026, fuel revenue increased by $43.8 million, or 7.0%, compared to the three months ended March 31, 2025, primarily due to a 6.3 million, or 2.8%, increase in gallons sold, as well as an increase in the average price of fuel in the first quarter of 2026 compared to the first quarter of 2025. Of total gallons sold, ARKO Retail Sites converted to dealer locations contributed 18.8 million gallons, which were partially offset by lower volumes at comparable wholesale sites, reflecting the challenging macroeconomic environment, as well as severe weather conditions in the quarter in several markets in which we operate.

For the three months ended March 31, 2026, other revenues, net increased by $6.2 million, or 59.7%, compared to the three months ended March 31, 2025, primarily due to additional rental income from ARKO Retail Sites converted to dealer locations.

Wholesale Operating Income

For the three months ended March 31, 2026, wholesale operating income increased by $4.4 million compared to the three months ended March 31, 2025 as a result of additional operating income from ARKO Retail Sites converted to dealer locations combined with increased operating income at comparable wholesale sites. An increase in other revenues, net, combined with an increase in fuel contribution of $2.8 million was partially offset by an increase in site operating expenses of $5.2 million in the first quarter of 2026 compared to the first quarter of 2025. These increases were primarily due to ARKO Retail Sites converted to dealer locations.

At fuel supply locations, fuel contribution increased by $1.2 million for the first quarter of 2026 compared to the first quarter of 2025, due to $1.6 million of incremental contribution from ARKO Retail Sites converted to dealer locations, which was partially offset by lower fuel contribution at comparable wholesale sites. At consignment agent locations, fuel contribution increased $1.6 million for the first quarter of 2026 compared to the first quarter of 2025, due to $0.5 million of incremental contribution from ARKO Retail Sites converted to dealer locations as well as higher fuel contribution at comparable wholesale sites. At both fuel supply locations and consignment agent locations, fuel margin per gallon increased, primarily as a result of significant volatility in the fuel market due to the geopolitical environment and increased prompt pay discounts related to higher fuel costs.

Fleet Fueling Segment

The table below shows the results of the fleet fueling segment for the three months ended March 31, 2026 and 2025, together with certain key metrics for the segment.

(in thousands)

1 Calculated as fuel revenue less fuel costs; excludes the fixed margin or fixed fee paid to the GPMP segment for the cost of fuel.

2 Calculated as fuel contribution divided by fuel gallons sold.

Three Months Ended March 31, 2026 versus Three Months Ended March 31, 2025

Fleet Fueling Revenues

For the three months ended March 31, 2026, fuel revenue increased by $8.9 million, or 7.5%, compared to the first quarter of 2025. The increase in fuel revenue was primarily due to an increase in the average price of fuel in the first quarter of 2026 compared to the first quarter of 2025, which was partially offset by 3.2% decrease in gallons sold.

For the three months ended March 31, 2026 and 2025, other revenues, net increased by $0.1 million compared to the first quarter of 2025.

Fleet Fueling Operating Income

For the three months ended March 31, 2026, fuel contribution increased by $1.4 million compared to the first quarter of 2025. At proprietary cardlocks, fuel contribution increased by $1.2 million, and fuel margin per gallon also increased for the first quarter of 2026 compared to the first quarter of 2025, and at third-party cardlock locations, fuel contribution increased $0.2 million, and fuel margin per gallon increased for the first quarter of 2026 compared to the first quarter of 2025. These increases were primarily due to favorable diesel margins as a result of significant volatility in the fuel market due to the geopolitical environment.

For the three months ended March 31, 2026, site operating expenses increased $0.6 million compared to the three months ended March 31, 2025.

GPMP Segment

The table below shows the results of the GPMP segment for the three months ended March 31, 2026 and 2025, together with certain key metrics for the segment.

(in thousands)

1 Includes the fixed margin or fixed fee paid to the GPMP segment for the cost of fuel.

2 Calculated as fuel revenue less fuel costs.

3 Calculated as fuel contribution divided by fuel gallons sold.

Three Months Ended March 31, 2026 versus Three Months Ended March 31, 2025

GPMP Revenues

For the three months ended March 31, 2026, fuel revenue – inter-segment increased by $130.4 million, or 22.0%, compared to the three months ended March 31, 2025. The increase in fuel revenue was primarily attributable to an increase in the average price of fuel for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 and greater gallons sold in the first quarter of 2026 compared to the first quarter of 2025 as a result of gallons in the fleet fueling segment, which transitioned to a fixed margin beginning February 1, 2026, as well as an increase in gallons sold related to ARKO Retail Sites that had been converted to dealer locations.

For the three months ended March 31, 2026, fuel revenue – related party decreased by $59.9 million, or 10.4%, compared to the three months ended March 31, 2025, resulting primarily from a 28.9 million, or 13.7%, decrease in gallons sold, reflecting the challenging macroeconomic environment as well as severe weather conditions in the quarter in several markets in which we operate, as well as the impact from ARKO Retail Sites converted to dealer locations, which was partially offset by an increase in the average price of fuel in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

For the three months ended March 31, 2026 and 2025, other revenues, net, and other revenues, net – related party related to the fixed fee charged to certain ARKO Retail Sites that were not supplied by GPMP were similar. The inter-segment fixed fee charged to sites in the fleet fueling segment that prior, to February 1, 2026, were not supplied by the GPMP segment was transitioned to a fixed margin and reflected in fuel revenue – inter-segment beginning February 1, 2026. As a result, other revenues, net – inter-segment decreased in the first quarter of 2026 compared to the first quarter of 2025.

GPMP Operating Income

For the three months ended March 31, 2026, fuel contribution increased by $4.6 million, compared to the three months ended March 31, 2025, primarily due to an increase in the fixed margin from 5.0 cents per gallon sold for the first quarter of 2025 to 6.0 cents per gallon sold for the first quarter of 2026, as well as the transition of sites in the fleet fueling segment to a fixed margin from a fixed fee beginning February 1, 2026, partially offset by fewer gallons sold to both ARKO Retail Sites and comparable wholesale sites.

For the three months ended March 31, 2026, general and administrative expenses decreased by $0.3 million compared to the three months ended March 31, 2025, and depreciation and amortization expenses for the three months ended March 31, 2026 remained consistent with the three months ended March 31, 2025.

Use of Non-GAAP Measures

We disclose certain measures on a “comparable wholesale sites” basis, which is a non-GAAP measure. Information disclosed on a “comparable wholesale sites” basis excludes wholesale sites added through ARKO Retail Sites converted to dealer locations until the first quarter in which these sites had a full quarter of wholesale activity in the prior year. We believe that this information is useful for our investors, securities analysts, and other interested parties by providing greater comparability regarding our ongoing operating performance. Neither this measure nor those described below should be considered an alternative to measurements presented in accordance with GAAP.

We define EBITDA as net income before net interest expense, income taxes, depreciation and amortization. Adjusted EBITDA further adjusts EBITDA by excluding the gain or loss on disposal of assets, impairment charges, acquisition costs, share-based compensation expense, other non-cash items, and other unusual or non-recurring charges. Both EBITDA and Adjusted EBITDA are non-GAAP financial measures.

We use EBITDA and Adjusted EBITDA for operational and financial decision-making and believe these measures are useful in evaluating our performance because they eliminate certain items that we do not consider indicators of our operating performance. EBITDA and Adjusted EBITDA are also used by many of our investors, securities analysts, and other interested parties in evaluating our operational and financial performance across reporting periods. We believe that the presentation of EBITDA and Adjusted EBITDA provides useful information to investors by allowing an understanding of key measures that we use internally for operational decision-making, budgeting, evaluating acquisition targets, and assessing our operating performance.

We define Net Debt as the sum of total debt, net, financing leases and financial liabilities, less cash and cash equivalents. Net Debt is used by management to measure the effective level of our indebtedness.

We define the Ratio of Net Debt to Adjusted EBITDA as the ratio derived by dividing Net Debt by Adjusted EBITDA. The Ratio of Net Debt to Adjusted EBITDA is an important measure used by our management to evaluate our access to liquidity, and we believe it provides useful information for investors as a representation of our financial strength by presenting the sustainability of our debt levels and our ability to take on additional debt against Adjusted EBITDA, which is used as an operating performance measure. The Ratio of Net Debt to Adjusted EBITDA is also frequently used by investors and credit rating agencies to analyze our operating performance.

We define Discretionary Cash Flow as net cash provided by operating activities, (i) less changes in operating assets and liabilities, maintenance capital expenditures, charges to allowance for credit losses, and non-cash rent expense, and (ii) plus acquisition costs, amortization of deferred income net of prepaid to related party, and certain other expenses (income). Discretionary Cash Flow will not reflect changes in working capital balances. Discretionary Cash Flow is a liquidity measure we and third parties, such as industry analysts, investors, lenders, rating agencies and others, use to assess our ability to internally fund our acquisitions, pay dividends, and service or incur additional debt. We believe that the presentation of Discretionary Cash Flow provides useful information to investors, securities analysts, and other interested parties for evaluating our liquidity.

EBITDA, Adjusted EBITDA, Net Debt, the Ratio of Net Debt to Adjusted EBITDA and Discretionary Cash Flow should not be considered as alternatives to any financial measure presented in accordance with GAAP, including net income and net cash provided by operating activities. These non-GAAP measures have limitations as analytical tools and should not be considered in isolation, or as substitutes for the analysis of our results as reported under GAAP. We strongly encourage investors to review our financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.

Because non-GAAP financial measures are not standardized, comparable wholesale sites, EBITDA, Adjusted EBITDA, Net Debt, the Ratio of Net Debt to Adjusted EBITDA and Discretionary Cash Flow, as defined by us, may not be comparable to similarly titled measures reported by other companies. It therefore may not be possible to compare our use of these non-GAAP financial measures with those used by other companies.

The following table contains a reconciliation of (i) net income to EBITDA and Adjusted EBITDA and (ii) net cash provided by operating activities to Discretionary Cash Flow for the three months ended March 31, 2026 and 2025.

(in thousands)

(a) Eliminates costs incurred that are directly attributable to business acquisitions and salaries of employees whose primary job function is to execute our acquisition strategy and facilitate integration of acquired operations.

(b) Eliminates the non-cash loss from the sale or disposal of property and equipment, the loss recognized upon the sale of related leased assets and impairment charges on property and equipment and right-of-use assets related to closed and non-performing sites.

(c) Eliminates non-cash share-based compensation expense related to our and ARKO Parent’s equity incentive programs to incentivize, retain, and motivate our employees and certain of ARKO Parent’s employees.

(d) Eliminates fair value adjustments primarily related to the contingent consideration owed to the seller for the Empire acquisition, which closed in 2020.

(e) Eliminates the payment of historical fuel and other tax amounts for multiple prior periods.

(f) Eliminates one-time costs incurred related to our IPO, which closed on February 13, 2026.

(g) Eliminates other unusual or non-recurring items that we do not consider to be meaningful in assessing operating performance.

(h) Excludes the change in current tax liabilities and accrued interest of $2.0 million and $0 for the three months ended March 31, 2026 and 2025, respectively.

(i) Historically, ARKO Parent has not distinguished between maintenance capital expenditures, growth capital expenditures, and acquisition capital expenditures (other than with respect to business acquisitions). Maintenance capital expenditures are capital expenditures made to maintain our long-term operating income or operating capacity, while growth and acquisition capital expenditures are capital expenditures that we expect will increase our operating income or operating capacity over the long-term. For the three months ended March 31, 2026 and 2025, we estimated that approximately $2.5 million and $1.3 million of our capital expenditures were maintenance capital expenditures, respectively, and that $3.5 million and $5.4 million of our capital expenditures were growth capital expenditures, respectively.

(j) Non-cash rent expense reflects the extent to which our GAAP rent expense recognized exceeded (or was less than) our cash rent payments. GAAP rent expense varies depending on the terms of our lease portfolio. For newer leases, our rent expense recognized typically exceeds our cash rent payments, whereas, for more mature leases, rent expense recognized is typically less than our cash rent payments.

(k) Includes other unusual or non-recurring items.

The following table contains a reconciliation of total debt, net to Net Debt as of March 31, 2026 and December 31, 2025, as well as the ratio of each of the most directly comparable GAAP measures to Net Debt and Adjusted EBITDA for the twelve months ended March 31, 2026 and the year ended December 31, 2025, respectively.

(in thousands, except ratios)

Liquidity and Capital Resources

Our primary sources of liquidity are cash flows from operations, availability under our credit facilities and our cash balances. Our principal liquidity requirements are the financing of current operations, funding capital expenditures (including acquisitions), satisfying our operating and financing lease obligations, and servicing debt. Additionally, we intend to distribute to our stockholders quarterly cash dividends taking into account Discretionary Cash Flow, after appropriate reserves for our working capital needs, investment capital expenditures, debt service and the prudent conduct of our business. Our Discretionary Cash Flow is likely to fluctuate from quarter to quarter, in some cases significantly, primarily as a result of the seasonality of our business operations and purchasing and payment patterns, which change based upon the day of the week. Accordingly, during quarters in which our business operations generate Discretionary Cash Flow in excess of the amount necessary to pay our stated quarterly dividend, we may reserve a portion of the excess to fund cash dividends in future quarters. In quarters in which we do not generate sufficient cash available to fund our stated quarterly cash dividend, we may use sources of cash not included in our calculation of Discretionary Cash Flow, such as net cash provided by financing activities, to pay dividends, subject to the discretion of our Board.

We finance our inventory purchases primarily from customary trade credit aided by relatively rapid inventory turnover, as well as cash generated from operations. Rapid inventory turnover allows us to conduct operations without the need for large amounts of cash and working capital. We largely rely on internally generated cash flows and borrowings for operations, which we believe are sufficient to meet our liquidity needs for the foreseeable future.

Our ability to meet our debt service obligations and other capital requirements, including capital expenditures, as well as the cost of acquisitions, will depend on our future operating performance which, in turn, will be subject to general economic, financial, business, competitive, legislative, regulatory and other conditions, many of which are beyond our control. As a normal part of our business, we will from time to time consider opportunities to repay, redeem, repurchase or refinance our indebtedness, depending on market conditions. Changes in our operating plans, lower than anticipated sales, increased expenses, acquisitions, or other events may cause us to seek additional debt or equity financing in future periods. Additional debt financing could impose increased cash payment obligations, as well as covenants that may restrict our operations. There can be no guarantee that financing will be available on acceptable terms or at all. As of March 31, 2026, substantially all of our debt bears interest at variable rates, which subjects us to interest rate risk and may require that we use more of our cash flow for the payment of interest if prevailing interest rates increase. See also “Quantitative and Qualitative Disclosures about Market Risk—Interest Rate Risk.”

As of March 31, 2026, we were in a strong liquidity position of approximately $731 million, consisting of approximately $22 million of cash and cash equivalents and $709 million of unused availability under our lines of credit available for certain purposes.

This liquidity position currently provides us with adequate funding to satisfy our contractual and other obligations from our existing cash balances. As of March 31, 2026, we had no outstanding borrowings under the $84.0 million PNC Line of Credit (as defined below) and $625.4 million of unused availability under our $800 million Capital One Line of Credit, which we may elect to increase up to $1.0 billion, subject to obtaining additional financing commitments from current lenders or other banks, and subject to certain other terms. Our liquidity position increased significantly following the closing of our IPO on February 13, 2026 and the exercise by the underwriters of their over-allotment option, which provided us with aggregate net proceeds of approximately $206.8 million, of which we used approximately $206.7 million to repay indebtedness under our Capital One Line of Credit.

We currently intend to pay a regular quarterly cash dividend of $0.50 per share to holders of our common stock, or $2.00 per share on an annualized basis. On March 27, 2026, the Board declared a quarterly dividend of $0.26 per share of common stock, pro-rated to reflect the portion of the first quarter of 2026 following the closing of our IPO on February 13, 2026. The dividend was paid on April 21, 2026 to stockholders of record as of April 10, 2026, totaling approximately $12.4 million. There can be no assurance that we will continue to pay such dividends or the amounts of such dividends. The amount and timing of dividends payable on our common stock are within the sole discretion of our Board, which will determine the amount, timing, and payment of any dividend in its sole discretion taking into account Discretionary Cash Flow, reserves for working capital and investment capital expenditures, debt service, the prudent conduct of our business, and other factors it deems relevant. Our objective is to pay our common stockholders a consistent and growing cash dividend that is sustainable on a long-term basis. Cash dividends paid in respect of our Class A common stock will also be paid in respect of our Class B common stock. As a result, dividends paid on our common stock will be received on a pro rata basis by holders of our Class A common stock and holders of our Class B common stock, which Class B common stock is held indirectly by ARKO Parent.

To date, we have funded capital expenditures primarily through funds generated from operations, funds received from vendors, sale-leaseback transactions, the issuance of debt, existing cash and ARKO Parent’s net investment. Future capital required to finance operations, pay dividends, consummate acquisitions, renovate our sites and add new fleet fueling locations is expected to come from cash on hand, cash generated by operations, availability under lines of credit, and additional long-term debt and equipment leases, as circumstances may dictate. We currently expect that our capital spending program will be primarily focused on maintaining our properties and equipment, renewal of supply agreements with dealers, pursuing new dealer contracts and acquiring additional dealer and cardlock locations, as well as expanding our fleet fueling footprint by building new locations. We do not expect such capital needs to adversely affect liquidity.

Cash Flows for the Three Months Ended March 31, 2026 and 2025

Net cash provided by (used in) operating activities, investing activities and financing activities for the three months ended March 31, 2026 and 2025 were as follows:

(in thousands)

Operating Activities

Cash flows provided by operations are our main source of liquidity. We have historically relied primarily on cash provided by operating activities, supplemented as necessary from time to time by borrowings on our credit facilities and other debt or equity transactions to finance our operations and to fund our capital expenditures. Cash flow provided by operating activities is primarily impacted by our net income and changes in working capital.

For the three months ended March 31, 2026, cash flows provided by operating activities were $6.6 million compared to $14.9 million for the three months ended March 31, 2025. The decrease for the first quarter of 2026 as compared to the prior year period was primarily the result of higher fuel prices which increased the cost of inventory and other working capital requirements and changes in working capital as a result of the day of the week on which the first quarter ended, which were partially offset by approximately $0.7 million of lower net interest payments, lower tax payments of $2.9 million and an increase in Adjusted EBITDA of $5.5 million.

Discretionary Cash Flow

For the three months ended March 31, 2026 and 2025, Discretionary Cash Flow was $25.0 million and $17.1 million, respectively. Refer to “Use of Non-GAAP Measures” above for discussion of this non-GAAP liquidity measure and related reconciliation to net cash provided by operating activities.

Investing Activities

Cash flows used in investing activities primarily reflect capital expenditures for acquisitions and replacing and maintaining existing facilities and equipment used in the business.

For the three months ended March 31, 2026, cash used in investing activities decreased by $0.9 million compared to the three months ended March 31, 2025. For the three months ended March 31, 2026, we utilized $5.8 million for capital expenditures, including investments in NTI fleet fueling locations, upgrades to fuel dispensers and other investments in our sites.

Financing Activities

Cash flows from financing activities primarily consist of increases and decreases in the principal amount of our lines of credit and debt, the issuance of common stock, net of dividends paid and prior to the IPO, net transfers to ARKO Parent.

For the three months ended March 31, 2026, financing activities consisted primarily of proceeds of $208.8 million, net of underwriting discounts, commissions and costs, from our IPO, net repayments of $209.4 million for long-term debt including the use of proceeds from our IPO to repay approximately $206.7 million of the indebtedness under our Capital One Line of Credit, repayments of $0.5 million for financing leases and $7.2 million of net transfers from ARKO Parent.

Indebtedness

Credit Facilities

Financing Agreements with M&T Bank

ARKO Parent has a credit agreement with M&T Bank, of which, preceding the IPO, certain of our subsidiaries were co-borrowers (the “M&T Credit Agreement”). This credit agreement provides a line of credit for up to $45.0 million to purchase equipment as well as real estate loans (the “M&T Term Loans”).

Prior to our IPO, the M&T Term Loans were secured by the real property of 78 sites acquired with the proceeds of such loans and certain other properties, of which 12 sites were attributable to the Business. The equipment loans were secured by the equipment acquired with the proceeds of such loans.

In connection with the consummation of our IPO, on February 11, 2026, the M&T Credit Agreement was amended to remove the Company’s subsidiaries as borrowers or guarantors thereunder, and the Company’s assets that previously served as collateral under the M&T Credit Agreement were released from M&T’s security interest.

ARKO Parent Related Party Notes

On February 13, 2026, we entered into subordinated, unsecured promissory notes (the “ARKO Parent Notes”) with subsidiaries of ARKO Parent in an aggregate principal amount of $14.9 million, which equaled the portion of the debt under the M&T Credit Agreement attributable to the Business. The material terms of the ARKO Parent Notes mirror those contained in the M&T Credit Agreement; provided that the ARKO Parent Notes have a 15-year term. The ARKO Parent Notes are intended to reflect the economics of, and align our payment obligations with, the portion of the indebtedness outstanding under the M&T Credit Agreement that is attributable to the Business.

Financing Agreement with PNC Bank, National Association (“PNC”)

ARKO Parent and certain subsidiaries (including certain of our subsidiaries) have financing arrangements with PNC to provide lines of credit for purposes of financing working capital. Prior to our IPO, ARKO Parent maintained a single line of credit with PNC (the “ARKO Parent PNC Line of Credit” and the credit agreement related thereto, the “ARKO Parent PNC Credit Agreement”).

In connection with the consummation of our IPO, the ARKO Parent PNC Credit Agreement was separated into two distinct credit facilities. The ARKO Parent PNC Credit Agreement was amended and restated to, among other things, remove the Company’s subsidiaries as co-borrowers from the ARKO Parent PNC Credit Agreement. Concurrently, certain of our subsidiaries entered into a separate amended and restated credit agreement with PNC (the “PNC Credit Agreement”) providing for a secured revolving credit facility (the “PNC Line of Credit”) with substantially similar terms as those under the ARKO Parent PNC Line of Credit; provided that the aggregate principal amount available under the ARKO Parent PNC Line of Credit is up to $56 million, and the PNC Line of

Credit is up to $84 million, which together is equal to the total aggregate availability under the ARKO Parent PNC Line of Credit prior to our IPO.

The PNC Line of Credit bears interest, as elected by the borrower at: (a) SOFR Adjusted plus Term SOFR (as defined in the PNC Credit Agreement) plus a margin of 1.25% to 1.75% or (b) a rate per annum equal to the alternate base rate (as defined in the PNC Credit Agreement) plus a margin of 0% to 0.50%. Every quarter, the SOFR margin rate and the alternate base rate margin rate are updated based on the quarterly average undrawn availability of the applicable line of credit. The calculation of the availability under the PNC Line of Credit is determined monthly subject to terms and limitations as set forth in the PNC Credit Agreement, taking into account the balances of receivables, inventory and letters of credit, among other things. As of March 31, 2026, an aggregate of $0.4 million of letters of credit was outstanding under the PNC Credit Agreement.

Financing Agreement with a Syndicate of Banks Led by Capital One, National Association (“Capital One”)

GPMP has a revolving credit facility with a syndicate of banks led by Capital One, National Association, in an aggregate principal amount of up to $800 million (the “Capital One Line of Credit”). At GPMP’s request, the Capital One Line of Credit can be increased up to $1.0 billion, subject to obtaining additional financing commitments from current lenders or from other banks, and subject to certain terms as detailed in the Capital One Line of Credit. The Capital One Line of Credit is available for general business purposes, including working capital, capital expenditures and permitted acquisitions.

The Capital One Line of Credit bears interest, as elected by GPMP at: (a) Adjusted Term SOFR (as defined in the agreement) plus a margin of 2.25% to 3.25% or (b) a rate per annum equal to the alternate base rate (as defined in the agreement) plus a margin of 1.25% to 2.25%. The margin is determined according to a formula in the Capital One Line of Credit that depends on GPMP’s leverage.

On January 13, 2026, GPMP entered into an amendment to the Capital One Line of Credit, and, during the quarter ended March 31, 2026, $206.7 million of the net proceeds from our IPO were used to repay the indebtedness under the Capital One Line of Credit. Additionally, the Company and certain of its subsidiaries entered into certain pledge and security agreements whereby the Capital One Line of Credit is secured by GPM Empire LLC’s interest in, and proceeds from, the Company’s agreements with ARKO Parent and the Company’s fuel supply agreements with certain of its fuel supply partners and a pledge of the Company’s equity interests in GPMP.

The Capital One Line of Credit matures on May 5, 2028. As of March 31, 2026, $174.1 million was drawn on the Capital One Line of Credit, an aggregate of $0.5 million of letters of credit was outstanding under the Capital One Line of Credit and $625.4 million was available thereunder.

Guarantee of ARKO Parent Senior Notes

As of March 31, 2026, ARKO Parent had outstanding $450.0 million aggregate principal amount of 5.125% Senior Notes due 2029 (the “Senior Notes”). Issued in October 2021, the Senior Notes are guaranteed, jointly and severally on an unsecured senior basis, by certain of ARKO Parent’s domestic subsidiaries, including us and certain of our subsidiaries (the “Guarantors”); however, neither GPMP nor any of its subsidiaries is a Guarantor.

The indenture governing the Senior Notes (the “Indenture”) provides for customary events of default, including (subject in certain cases to customary grace and cure periods), nonpayment of principal or interest; covenant breaches; cross-defaults on other indebtedness and certain bankruptcy events, upon which the trustee or the holders of at least 25% in aggregate principal amount of the Senior Notes then outstanding may accelerate all outstanding obligations thereunder. The Guarantors have unconditionally and irrevocably guaranteed, jointly and severally, on a senior unsecured basis, (a) the full and punctual payment of principal of and interest on the Senior Notes and all other monetary and performance obligations of ARKO Parent thereunder (collectively, the “Guaranteed Obligations”), with contribution rights among Guarantors based on their respective net assets.

The guarantees of the Senior Notes by us and certain of our subsidiaries represent an off-balance sheet obligation. We believe that the likelihood of the Guarantors, including us, being required to make payments under the Guarantee Obligations is remote based on ARKO Parent’s current financial condition and anticipated financial performance, but that likelihood would increase if ARKO Parent’s financial condition deteriorates.

Critical Accounting Estimates

For the three months ended March 31, 2026, there were no material changes to our critical accounting estimates described in our Annual Report on Form 10-K for the year ended December 31, 2025 that have had a material impact on our condensed consolidated financial statements and related notes.

Quantitative and Qualitative Disclosures about Market Risk

Commodity Price Risk

We have limited exposure to commodity price risk as a result of the payment and volume-related discounts in certain of our fuel supply contracts with our fuel suppliers, which are based on the market price of motor fuel. Significant increases in fuel prices could result in significant increases in the retail price of fuel and in lower sales to dealers, fleet fueling customers and ARKO Retail Sites. When fuel prices rise, some of our dealers may have insufficient credit to purchase fuel from us at their historical volumes. In addition, significant and persistent increases in the retail price of fuel could also diminish consumer demand, which could subsequently diminish the volume of fuel we distribute to ARKO Retail Sites. From time to time, we make use of derivative commodity instruments to manage risks associated with an immaterial number of gallons designed to offset changes in the price of fuel that are directly tied to firm commitments to purchase diesel fuel.

Interest Rate Risk

We may be subject to market risk from exposure to changes in interest rates based on our financing, investing, and cash management activities. As of March 31, 2026 and March 31, 2025, the interest rate on our Capital One Line of Credit was 6.0% and 7.2%, respectively. As of March 31, 2026, the interest rate on the ARKO Parent Notes was 5.9%. As of March 31, 2025, the interest rate on the M&T Term Loans attributable to Business was 7.4% and the interest rate on the M&T equipment loans attributable to the Business was 7.1%. As of March 31, 2026, substantially all of our debt bears interest at variable rates. Based on the outstanding balances at March 31, 2026, if our applicable interest rates each increase by 1%, then our debt service on an annual basis would increase by approximately $1.9 million. Interest rates on commercial bank borrowings and debt offerings could be higher than current levels, causing our financing costs to increase accordingly. Although this could limit our ability to raise funds in the debt capital markets, we expect to remain competitive with respect to acquisitions and capital projects, as our competitors would likely face similar circumstances.

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based on management’s evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2026.

Changes to the Company’s Internal Control Over Financial Reporting

There were no changes to the Company’s internal control over financial reporting that occurred during the calendar quarter covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

During the reporting period covered by this Quarterly Report on Form 10-Q, there have been no material changes to our risk factors as set forth in our Annual Report on Form 10-K for the year ended December 31, 2025.