Arko (ARKO) Q2 2025 earnings summary

Executive summary

• Adjusted EBITDA for Q2 2025 was $76.9 million, down from $80.1 million year-over-year but above guidance midpoint, despite macroeconomic headwinds and soft consumer demand.

• Net income for Q2 2025 rose to $20.1 million from $14.1 million year-over-year, driven by a non-cash gain, with net income attributable to shareholders at $18.7 million.

• Dealerization program continued, with 70 stores converted in Q2, 282 since mid-2024, and over 500 targeted by 2026, expected to deliver over $20 million in annualized operating income benefit.

• Loyalty program enrollment grew nearly 10% year-over-year, with members spending and visiting more frequently.

• New store formats and food service concepts launched, with strong early results in remodeled and flagship stores.

Financial highlights

• Q2 2025 revenue was $1.99 billion, down 16.3% year-over-year; net income per diluted share was $0.16, up from $0.11.

• Adjusted EBITDA was $76.9 million, down from $80.1 million year-over-year; six-month Adjusted EBITDA was $107.8 million, down from $113.2 million.

• Retail segment operating income was $80.4 million (vs. $87.9 million prior year); wholesale $23.2 million (vs. $21.3 million); fleet $13.1 million (vs. $13.7 million).

• Same-store merchandise sales (ex-cigarettes) down 3%; total same-store merchandise sales down 4.2%; same-store fuel gallons declined 6.5%.

• Merchandise margin improved to 33.6% from 32.8% year-over-year; retail fuel margin up to 44.9 cents per gallon.

Outlook and guidance

• Q3 2025 adjusted EBITDA expected between $70 million and $80 million; full-year 2025 guidance maintained at $233 million–$253 million.

• Retail segment: Q3 merchandise sales and gallons per store expected up mid-single digits, but same-store performance down modestly.

• Wholesale segment: Q3 operating income growth expected in mid to high teens percent.

• Fleet segment: Q3 operating income growth expected low single digits.

• Capital spending to focus on remodels, new formats, and opportunistic acquisitions.