ARKO Corp. Reports Third Quarter 2025 Results

Core Insights - ARKO Corp. reported a net income of $13.5 million for Q3 2025, an increase from $9.7 million in the same quarter last year, indicating a positive trend in profitability [6] - The company is focused on executing its transformation plan, which includes advancing its dealerization program and improving operational efficiency despite a challenging consumer environment [4][6] - Adjusted EBITDA for the quarter was $75.2 million, slightly down from $78.8 million year-over-year, reflecting ongoing operational adjustments [6] Financial Performance - Total revenues for Q3 2025 were $2.02 billion, down from $2.28 billion in Q3 2024 [39] - Merchandise revenue decreased to $389.7 million from $469.6 million, while merchandise margin improved to 33.7% from 32.8% [6][39] - Fuel revenue was $1.6 billion, down from $1.78 billion, with a retail fuel margin of 43.6 cents per gallon, up from 41.3 cents per gallon [39] Operational Highlights - The company converted 65 retail stores to dealer sites in Q3 2025, totaling 194 conversions year-to-date, with expectations of over $20 million in annualized operating income benefits from channel optimization [6][9] - ARKO advanced its retail store remodeling pilot program, focusing on enhancing customer experience with improved layouts and food offerings [6] - The company opened new-to-industry locations, including a Dunkin' store and two additional stores, with plans for further expansions in 2026 [6] Capital Management - The Board declared a quarterly dividend of $0.03 per share, to be paid on December 1, 2025, reflecting confidence in cash generation capabilities [21] - The company repurchased approximately 0.9 million shares for $4.2 million during the quarter, with $7.2 million remaining under the share repurchase program [22][21] Liquidity and Debt - As of September 30, 2025, ARKO had total liquidity of approximately $891 million, consisting of $307 million in cash and $584 million in available credit [20] - Outstanding debt was approximately $912 million, resulting in net debt of about $605 million [20] Guidance - For Q4 2025, the company expects Adjusted EBITDA to range between $50 million and $60 million, with full-year 2025 Adjusted EBITDA guidance updated to between $233 million and $243 million [26]