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¹ See Use of Non-GAAP Measures below.
² All figures for fuel costs, fuel contribution and fuel margin per gallon exclude the estimated fixed margin or fixed fee paid to the Company’s wholesale fuel distribution subsidiary, GPM Petroleum LP (“GPMP”) for the cost of fuel (intercompany charges by GPMP).

“We navigated a challenging macroeconomic environment in 2024, while advancing the development of our multi-year transformation plan," said Arie Kotler, Chairman, President, and CEO of ARKO. “We made progress with our dealerization program by strategically refining our retail footprint, strengthening merchandising initiatives, and enhancing customer engagement through value-driven promotions for in-store merchandise and, more recently, a more aggressive value offer at the pump. Our focus on operational efficiencies and the dealerization program allowed us to manage through industry-wide headwinds while making strategic investments in high-growth areas, such as food service and other tobacco products to meet evolving customer preferences.”

Mr. Kotler continued: “Looking ahead to 2025, we remain committed to driving sustainable long-term growth and value creation for our stakeholders. We plan to strengthen our competitiveness by continuing to invest in higher-growth categories, delivering further value to our customers and further optimizing our store portfolio. We are acutely focused on delivering innovative, value-driven solutions that enhance the customer experience while maximizing profitability and expanding revenue opportunities.”

Fourth Quarter and Full Year 2024 Segment Highlights

Retail

Merchandise contribution for the fourth quarter of 2024 decreased $11.9 million, or 8.1%, compared to the fourth quarter of 2023, while merchandise margin increased to 33.0% in the fourth quarter of 2024 compared to 32.9% in 2023. The decrease in merchandise contribution was due to a decrease in same store merchandise contribution of $6.2 million and a decrease of $7.7 million related to underperforming retail stores that were closed or converted to dealers, partially offset by an increase in merchandise contribution of $2.0 million from the SpeedyQ acquisition that closed in April 2024.  Merchandise contribution at same stores decreased in the fourth quarter of 2024 primarily due to lower contribution from several core destination categories and cigarettes, partially offset by higher contribution from other tobacco products.

For the year ended December 31, 2024, merchandise contribution decreased $5.6 million, or 0.9%, compared to the year ended December 31, 2023, while merchandise margin increased to 32.8% in 2024 from 31.8% in 2023. The decrease in merchandise contribution was due to a decrease in same store merchandise contribution of $17.0 million and a decrease in merchandise contribution of $11.6 million related to underperforming retail stores that were closed or converted to dealers, partially offset by incremental merchandise contribution from recent acquisitions of $21.7 million.

For the fourth quarter of 2024, retail fuel contribution decreased $9.1 million to $100.2 million compared to the prior year period, with a same store fuel contribution decrease of $7.4 million attributable to gallon demand declines reflecting the challenging macro-economic environment. Fuel margin of 38.7 cents per gallon was down 0.5 cents per gallon compared to the fourth quarter of 2023, resulting from lower fuel costs and reduced price volatility this year. In addition, a decrease in retail fuel contribution of $3.7 million was related to underperforming retail stores that were closed or converted to dealers, partially offset by incremental fuel contribution from the SpeedyQ acquisition of approximately $1.8 million.

For the year ended December 31, 2024, fuel contribution decreased $7.1 million, or 1.6%, compared to the year ended December 31, 2023, while fuel margin per gallon increased. Same store fuel margin per gallon for 2024 increased to 39.7 cents per gallon from 39.0 cents per gallon for 2023. Incremental fuel contribution from recent acquisitions of approximately $16.8 million was more than offset by a decrease in same store fuel contribution of $18.6 million. In addition, a decrease in fuel contribution of $6.1 million was related to underperforming retail stores that were closed or converted to dealers compared to 2023.

Wholesale

Fuel contribution was approximately $22.3 million for the fourth quarter of 2024 compared to $21.6 million for the fourth quarter of 2023. Fuel contribution for the fourth quarter of 2024 at fuel supply locations increased by $0.5 million, and fuel contribution at consignment agent locations increased by $0.2 million, as compared to the prior year period, with fuel margin increases of 0.2 cents per gallon and 1.4 cents per gallon, respectively. For the fourth quarter of 2024, other revenues, net, increased by approximately $1.8 million, while site operating expenses increased by $0.6 million compared to the prior year period, resulting from the retail stores that were converted to dealers.

For the year ended December 31, 2024, wholesale operating income increased $0.8 million, compared to 2023. An increase of approximately $3.4 million in other revenues, net, was partially offset by a decrease in fuel contribution of approximately $2.6 million in 2024 compared to 2023. At fuel supply locations, fuel contribution decreased by $0.5 million, and fuel margin per gallon remained consistent with 2023, primarily due to decreased prompt pay discounts related to lower fuel costs and lower volumes at comparable wholesale sites, which was partially offset by incremental contribution from recent acquisitions and the retail stores converted to dealers. At consignment agent locations, fuel contribution decreased $2.1 million while fuel margin per gallon increased for 2024 compared to 2023, primarily due to incremental contribution from recent acquisitions and the retail stores converted to dealers, which was offset by lower rack-to-retail margins and decreased prompt pay discounts related to lower fuel costs.

Fleet Fueling

For the fourth quarter of 2024, fuel contribution increased by $2.9 million compared to the fourth quarter of 2023. At proprietary cardlocks, fuel contribution increased by $2.7 million, and fuel margin per gallon also increased for the fourth quarter of 2024 compared to the fourth quarter of 2023. At third-party cardlock locations, fuel contribution increased by $0.3 million, and fuel margin per gallon also increased for the fourth quarter of 2024 compared to the fourth quarter of 2023.

For the year ended December 31, 2024, fuel contribution increased by $8.4 million compared to the year ended December 31, 2023. At proprietary cardlocks, fuel contribution increased by $7.9 million, and fuel margin per gallon also increased for the year ended December 31, 2024, compared to the year ended December 31, 2023. At third-party cardlock locations, fuel contribution increased $0.5 million, and fuel margin per gallon also increased for 2024 compared to 2023. These changes were primarily due to higher volumes and the cardlocks acquired in the Company’s acquisition of certain sites from WTG Fuels Holdings, LLC in 2023.

Site Operating Expenses

For the quarter ended December 31, 2024, convenience store operating expenses decreased $13.0 million, or 6.5%, compared to the prior year period primarily due to a decrease of $14.3 million from underperforming retail stores that were closed or converted to dealers and a decrease in same store operating expenses of $2.2 million, or 1.2%. The decrease in convenience store operating expenses was partially offset by incremental expenses related to the SpeedyQ acquisition that closed in April 2024.

For the year ended December 31, 2024, convenience store operating expenses increased $11.2 million, or 1.4%, as compared to the year ended December 31, 2023, primarily due to $33.1 million of incremental expenses related to recent acquisitions. The increase in site operating expenses was partially offset by a decrease in same store operating expenses of $0.4 million, and $22.1 million of reduced expenses for underperforming retail stores that were closed or converted to dealers.

Liquidity and Capital Expenditures

As of December 31, 2024, the Company’s total liquidity was approximately $841 million, consisting of approximately $262 million of cash and cash equivalents and approximately $579 million of availability under lines of credit. Outstanding debt was $881 million, resulting in net debt, excluding lease related financing liabilities, of approximately $619 million. Capital expenditures were $36.1 million, and $113.9 million for the quarter and year ended December 31, 2024, respectively.

Quarterly Dividend and Share Repurchase Program

The Company’s ability to return cash to its stockholders through its cash dividend program and share repurchase program is consistent with its capital allocation framework and reflects the Company’s confidence in the strength of its cash generation ability and strong financial position.

The Board declared a quarterly dividend of $0.03 per share of common stock to be paid on March 21, 2025 to stockholders of record as of March 10, 2025.

There was approximately $25.7 million remaining under the share repurchase program as of December 31, 2024.

Company-Operated Retail Store Count and Segment Update

The following tables present certain information regarding changes in the retail, wholesale and fleet fueling segments for the periods presented:

First Quarter and Full Year 2025 Guidance

The Company currently expects first quarter 2025 Adjusted EBITDA to range between $27 million and $33 million, with an assumed range of average retail fuel margin from 37.0 to 39.0 cents per gallon. The Company currently expects full year 2025 Adjusted EBITDA to range between $233 million and $253 million, with an assumed range of average retail fuel margin from 39.5 to 41.5 cents per gallon.

The Company is not providing guidance on net income at this time due to the volatility of certain required inputs that are not available without unreasonable efforts, including future fair value adjustments associated with its stock price, as well as depreciation and amortization related to its capital allocation as part of its focus on accelerating organic growth.

Conference Call and Webcast Details

The Company will host a conference call today, February 26, 2025, to discuss these results at 5:00 p.m. Eastern Time. Investors and analysts interested in participating in the live call can dial 877-605-1792 or 201-689-8728.

A simultaneous, live webcast will also be available on the Investor Relations section of the Company’s website at https://www.arkocorp.com/news-events/ir-calendar. The webcast will be archived for 30 days.

About ARKO Corp.

ARKO Corp. (Nasdaq: ARKO) is a Fortune 500 company that owns 100% of GPM Investments, LLC and is one of the largest operators of convenience stores and wholesalers of fuel in the United States. Based in Richmond, VA, our highly recognizable Family of Community Brands offers delicious, prepared foods, beer, snacks, candy, hot and cold beverages, and multiple popular quick serve restaurant brands. We operate in four reportable segments: retail, which includes convenience stores selling merchandise and fuel products to retail customers; wholesale, which supplies fuel to independent dealers and consignment agents; fleet fueling, which includes the operation of proprietary and third-party cardlock locations, and issuance of proprietary fuel cards that provide customers access to a nationwide network of fueling sites; and GPM Petroleum, which sells and supplies fuel to our retail and wholesale sites and charges a fixed fee, primarily to our fleet fueling sites. To learn more about GPM stores, visit: www.gpminvestments.com. To learn more about ARKO, visit: www.arkocorp.com.

Forward-Looking Statements

This document includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may address, among other things, the Company’s expected financial and operational results and the related assumptions underlying its expected results. These forward-looking statements are distinguished by use of words such as “accretive,” “anticipate,” “aim,” “believe,” “continue,” “could,” “estimate,” “expect,” “guidance,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and the negative of these terms, and similar references to future periods. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to, among other things, changes in economic, business and market conditions; the Company’s ability to maintain the listing of its common stock and warrants on the Nasdaq Stock Market; changes in its strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; expansion plans and opportunities; changes in the markets in which it competes; changes in applicable laws or regulations, including those relating to environmental matters; market conditions and global and economic factors beyond its control; and the outcome of any known or unknown litigation and regulatory proceedings. Detailed information about these factors and additional important factors can be found in the documents that the Company files with the Securities and Exchange Commission, such as Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements speak only as of the date the statements were made. The Company does not undertake an obligation to update forward-looking information, except to the extent required by applicable law.

Use of Non-GAAP Measures

The Company discloses certain measures on a “same store basis,” which is a non-GAAP measure. Information disclosed on a “same store basis” excludes the results of any store that is not a “same store” for the applicable period. A store is considered a same store beginning in the first quarter in which the store had a full quarter of activity in the prior year. The Company believes that this information provides greater comparability regarding its ongoing operating performance. Neither this measure nor those described below should be considered an alternative to measurements presented in accordance with generally accepted accounting principles in the United States (“GAAP”).

The Company defines 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 and divestiture 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.

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

EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be considered as a substitute for net income or any other financial measure presented in accordance with GAAP. These measures have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of its results as reported under GAAP. The Company strongly encourages investors to review its 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, same store measures, EBITDA and Adjusted EBITDA, as defined by the Company, may not be comparable to similarly titled measures reported by other companies. It therefore may not be possible to compare the Company’s use of these non-GAAP financial measures with those used by other companies.

Company Contact
Jordan Mann
ARKO Corp.
investors@gpminvestments.com

Investor Contact
Sean Mansouri, CFA
Elevate IR
(720) 330-2829
ARKO@elevate-ir.com

Supplemental Disclosure of Non-GAAP Financial Information

Supplemental Disclosures of Segment Information

Retail Segment

The table below shows financial information and certain key metrics of the SpeedyQ acquisition in the Retail Segment for which there is no comparable information for any of the prior periods.

Wholesale Segment

Fleet Fueling Segment