Financial Data and Key Metrics Changes - Adjusted EBITDA for Q4 2025 grew 16% year-over-year to $66 million, reflecting strong operational execution [5][20] - Net income for Q4 2025 was $1.9 million, reversing a net loss of $2.3 million from the prior year [20] - For the full year 2025, net income was $22.7 million, compared to $20.8 million in 2024 [25] - Adjusted EBITDA for the full year 2025 was $248.7 million, flat compared to $248.9 million in 2024 [24] Business Line Data and Key Metrics Changes - Retail segment merchandising margin increased by 140 basis points to 34.4% in Q4 2025 [20] - Same-store merchandise sales were down 3% for Q4 and down 4.1% for the full year 2025 [20] - Retail fuel same-store gallons were down 4.1% for Q4 and down 5.4% for the full year 2025 [22][25] - Wholesale fuel contribution increased 8% to $24 million in Q4 2025 [23] - Fleet Fueling fuel contribution was $15.9 million for Q4 2025, compared to $16.3 million last year [24] Market Data and Key Metrics Changes - The company gained market share in every nicotine category in 2025, with OTP up 4% and energy drinks up 8% [15] - Same-store merchandise sales showed mid-single digit growth in January and February 2026, despite disruptions from winter storms [15] Company Strategy and Development Direction - The company is focused on executing its transformation plan, optimizing its retail footprint, and improving cost structure [5][6] - The IPO of ARKO Petroleum Corp. was a major milestone, providing greater transparency and unlocking value for shareholders [6][7] - The company aims to expand its wholesale and fleet fueling business, targeting significant growth opportunities in a fragmented industry [8][56] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers remain cautious and value-focused, impacting spending behavior [5][15] - The company expects 2026 Adjusted EBITDA to range between $245 million and $265 million, with same-store retail sales anticipated to improve [27] - Management emphasized the importance of disciplined capital deployment and analytics in driving growth [19] Other Important Information - The company finished 2025 with $305 million in cash, enhancing its liquidity and financial flexibility [26] - A new CFO, Galagher Jeff, was appointed, bringing extensive retail experience to the leadership team [16][18] Q&A Session Summary Question: Can you unpack the drivers of improvement in merchandise sales for retail? - Management highlighted execution, marketing initiatives, and loyalty programs as key drivers, with significant improvements in high-margin categories [32][33] Question: What is the cost of capital for remodels? - Major remodels cost approximately $1 million, while soft remodels could range from $400,000 to $700,000 [37][38] Question: Is the pressure in the Midwest still present? - Management confirmed ongoing pressure in the Midwest but noted improvements in other regions as fuel prices dropped [46][47] Question: Do the $3, $4, $5, $6 value meal deals drive merchandise margin expansion? - Promotions are supported by vendors and do not lower margins; they drive customer traffic and increase sales in higher-margin categories [49][50] Question: What are the M&A opportunities for APC now that it has a separate balance sheet? - The company has over $635 million available for acquisitions in a fragmented industry, targeting significant growth in fuel distribution [56][57]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q4 2025 grew 16% year-over-year to $66 million, with net income of $1.9 million, reversing a net loss of $2.3 million from the prior year [5][20]. - Retail merchandising margin increased by 140 basis points to 34.4%, while same-store merchandise sales were down 3% for the quarter and down 4.1% for the fiscal year 2025 [5][20]. - Retail fuel same-store gallons were down 4.1% for Q4 and down 5.4% for the fiscal year 2025, but retail fuel margins improved to approximately $0.445 per gallon in Q4 [20][21]. Business Line Data and Key Metrics Changes - The wholesale segment saw an 8% increase in fuel contribution to $24 million in Q4, with wholesale gallons increasing by 4% to 249 million gallons [21][22]. - Fleet Fueling segment contributed $15.9 million for Q4, with gallons totaling 34.9 million, compared to 36.1 million gallons in the prior year [22][23]. - Adjusted EBITDA for the year was $248.7 million, flat compared to $248.9 million in 2024, indicating strong cost control despite volume headwinds [23][24]. Market Data and Key Metrics Changes - The company gained market share in every nicotine category in 2025, with OTP up 4% and energy drinks up 8% [15][32]. - The consumer remains cautious, with spending driven by value-focused promotions and convenience [15][46]. - Early 2026 trends show mid-single-digit growth in same-store merchandise sales, despite disruptions from winter storms [15][16]. Company Strategy and Development Direction - The company is focused on executing its transformation plan, optimizing its retail footprint, and improving cost structure [5][9]. - The IPO of ARKO Petroleum Corp. was a significant milestone, providing greater transparency and unlocking value for shareholders [6][8]. - The dealerization strategy is a key lever for transformation, with 409 conversions completed and additional sites committed [10][11]. Management's Comments on Operating Environment and Future Outlook - Management noted that the consumer is still cautious, but execution across various initiatives has led to improved performance [5][15]. - The company expects 2026 Adjusted EBITDA to range between $245 million and $265 million, with same-store retail sales anticipated to improve several hundred basis points versus 2025 [26][27]. - The balance sheet remains strong, with $305 million in cash and a disciplined approach to capital allocation [25][24]. Other Important Information - The company is targeting 20 new NTI cardlock locations in 2026, with expected mid to high teens returns [14][56]. - Leadership changes include Gallagher Jeff as the new CFO, bringing extensive retail experience [16][18]. Q&A Session Summary Question: Merchandise sales improvement drivers - Management highlighted execution and marketing initiatives, including the Fueling America campaign, which increased loyalty transactions and market share in key categories [30][32]. Question: Remodel costs and opportunities - The cost of a major remodel is approximately $1 million, while a soft remodel could cost between $400,000 and $700,000 [36][37]. Question: Retail base post-dealerization - Most stores retained post-dealerization require less capital investment, focusing on food service enhancements rather than full remodels [39][40]. Question: Consumer pressure in the Midwest - Pressure in the Midwest continues, but overall spending has eased as fuel prices dropped below $2.50 [45][47]. Question: Promotions impact on margins - Promotions are vendor-supported and do not lower margins, instead driving customer traffic and increasing sales in higher-margin categories [49][50].