Arko Corp.

Company Overview

Business Model: ARKO Corp. operates as one of the largest convenience store operators and fuel wholesalers in the United States. Its core value proposition involves providing convenience items and fuel to retail customers through a network of regional store brands, supplying fuel to third-party dealers, and operating a fleet fueling business. Revenue is primarily generated from fuel sales, in-store merchandise sales, and commissions from fleet fueling services.

Market Position: ARKO Corp. is ranked among the largest operators of convenience stores by store count and wholesalers of fuel by gallons sold in the U.S. As of December 31, 2025, it operated 1,118 retail convenience stores under more than 25 regional store brands and supplied fuel to 2,099 dealer locations. The company also operates a fleet fueling business with 295 proprietary and third-party cardlock locations. Its strategy focuses on secondary and tertiary markets, where approximately 46% of its retail stores are in cities with populations under 20,000 and 23% in cities between 20,000 and 50,000, leveraging local brand recognition while benefiting from centralized operations.

Recent Strategic Developments:

• Transformation Plan: Since the second half of 2024, ARKO Corp. has been implementing a multi-year Transformation Plan. This plan includes the conversion of retail stores to dealer locations, leveraging its wholesale distribution platform. As of December 31, 2025, 256 retail stores were converted to dealer locations, totaling 409 conversions since mid-2024, resulting in approximately $11.8 million in incremental operating income before general and administrative expenses for 2025.
• ARKO Petroleum Corp. IPO: On February 13, 2026, ARKO Petroleum Corp., a subsidiary, completed an initial public offering (IPO) of a minority interest. Post-IPO, ARKO Corp. owns 75.9% of the economic interests and 94.0% of the combined voting power of ARKO Petroleum Corp. This new structure designates ARKO Petroleum Corp. as the primary operating entity for the wholesale, fleet fueling, and GPMP segments, while GPM Investments, LLC remains the primary operating entity for the retail segment.
• Retail Organic Growth: Initiatives include enhancing marketing and merchandising, expanding six core destination merchandise categories (packaged beverages, candy, salty snacks, packaged sweet snacks, alternative snacks, and beer), and strengthening the fas REWARDS loyalty program, which had approximately 2.4 million enrolled members as of December 31, 2025.
• New Store Formats & Remodels: In June 2025, ARKO Corp. launched its new fas craves flagship location, emphasizing relevant, delicious, and affordable food offerings within remodeled stores. The company plans approximately 25 additional remodels featuring fas craves elements in 2026. In 2025, one Dunkin' store and two new-to-industry (NTI) retail stores opened, with plans for two more NTI retail stores and three Dunkin' stores in 2026.
• Fleet Fueling Expansion: ARKO Corp. targets 20 NTI fleet fueling locations for 2026, with 10 currently advancing, aiming for high-return, capital-efficient organic growth.
• Acquisition Strategy: ARKO Corp. has a strong track record of acquisitions, completing 26 from 2013 through 2025, growing its site count from 320 in 2011 to 3,512 as of December 31, 2025. Recent acquisitions include 21 SpeedyQ Markets convenience stores in Michigan in April 2024.

Geographic Footprint: As of December 31, 2025, ARKO Corp. operated in the District of Columbia and more than 30 states across the Mid-Atlantic, Midwestern, Northeastern, Southeastern, and Southwestern U.S.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: 15.4% (2025) vs. 14.6% (2024)
• Operating Margin: 1.3% (2025) vs. 1.1% (2024)
• Net Margin: 0.3% (2025) vs. 0.2% (2024)

Investment in Growth:

• R&D Expenditure: Not explicitly disclosed as a separate line item.
• Capital Expenditures: $127.3 million (2025)
• Strategic Investments: Capital expenditures in 2025 included $23.6 million for the purchase of 23 fee properties, investments in NTI retail stores, remodeling of new format stores (fas craves), EV chargers, and upgrades to fuel dispensers.

Business Segment Analysis

Retail Segment

Financial Performance:

• Revenue: $4,377.1 million (2025) vs. $5,342.5 million (2024) (-18.1% YoY)
• Operating Income: $268.4 million (2025) vs. $282.4 million (2024) (-4.9% YoY)
• Fuel Gallons Sold: 922.7 million (2025) vs. 1,081.0 million (2024) (-14.6% YoY)
• Fuel Margin per Gallon: 42.8 cents (2025) vs. 39.6 cents (2024) (+8.1% YoY)
• Merchandise Revenue: $1,482.5 million (2025) vs. $1,767.3 million (2024) (-16.1% YoY)
• Merchandise Margin: 33.7% (2025) vs. 32.8% (2024) (+2.7% YoY)
• Key Growth Drivers: Increased same store fuel contribution ($1.5 million increase), incremental fuel and merchandise contribution from the SpeedyQ Acquisition, and an increase in merchandise margin. These were partially offset by a 5.4% decrease in same store gallons sold and a 4.1% decrease in same store merchandise sales, primarily due to a challenging macroeconomic environment and severe weather conditions in early 2025. The conversion of retail stores to dealer locations also negatively impacted retail gallons and merchandise revenue.

Product Portfolio:

• Major product lines and services: Fuel products, grab-n-go hot and cold prepared foods, dispensed beverages, packaged beverages, beer, candy, salty snacks, bakery and packaged sweet snacks, general and seasonal merchandise, cigarettes, and other tobacco products (moist tobacco, vape, nicotine pouches, cigars).
• Foodservice offerings: Available at approximately 965 stores, including bakery, Nathan’s hot dogs, Tornado roller grill items. 140 stores feature delis with fried chicken, pizza, breakfast sandwiches, and more. Approximately 90 quick service major national brand restaurants (e.g., Dunkin', Subway) are also present.
• Other services: Lottery, prepaid products, gift cards, money orders, ATMs, skill gaming, Bitcoin ATMs, and car washes at approximately 65 locations.
• EV Chargers: 211 EV chargers at 72 locations across 16 states as of December 31, 2025.

Market Dynamics:

• Competitive positioning: Operates under more than 25 regional store brands, benefiting from local recognition and centralized marketing/procurement. Focus on secondary and tertiary markets.
• Key customer types and market trends: Retail customers. Facing competition from other convenience stores, gas stations, large and small food retailers, quick service restaurants, and dollar stores.

Wholesale Segment

Financial Performance:

• Revenue: $2,753.1 million (2025) vs. $2,829.0 million (2024) (-2.7% YoY)
• Operating Income: $89.4 million (2025) vs. $79.8 million (2024) (+12.0% YoY)
• Fuel Gallons Sold: 989.1 million (2025) vs. 949.4 million (2024) (+4.2% YoY)
  • Fuel supply locations: 836.2 million gallons (2025) vs. 794.8 million gallons (2024) (+5.2% YoY)
  • Consignment agent locations: 152.8 million gallons (2025) vs. 154.6 million gallons (2024) (-1.2% YoY)
• Fuel Margin per Gallon (fuel supply): 6.3 cents (2025) vs. 6.0 cents (2024) (+5.0% YoY)
• Fuel Margin per Gallon (consignment): 27.5 cents (2025) vs. 27.4 cents (2024) (+0.4% YoY)
• Key Growth Drivers: Increase in gallons sold, primarily from the conversion of 79.7 million retail gallons to dealer locations. This contributed $6.9 million in incremental fuel contribution from converted retail stores. An increase in other revenues, net, also contributed to operating income growth.

Product Portfolio:

• Supplies branded and unbranded fuel to dealers, sub-wholesalers, and bulk and spot purchasers. Branded fuel includes Valero, Marathon, BP, Exxon, and Shell.

Market Dynamics:

• Competitive positioning: Competes with refiners and other independent third-party motor fuel distributors. Differentiates by offering competitive pricing, a variety of branded and unbranded fuel options, and competitive arrangements for fuel equipment.

Fleet Fueling Segment

Financial Performance:

• Revenue: $483.8 million (2025) vs. $524.6 million (2024) (-7.8% YoY)
• Operating Income: $48.6 million (2025) vs. $48.5 million (2024) (+0.2% YoY)
• Fuel Gallons Sold: 142.8 million (2025) vs. 148.9 million (2024) (-4.1% YoY)
  • Proprietary cardlock locations: 129.5 million gallons (2025) vs. 136.1 million gallons (2024) (-4.8% YoY)
  • Third-party cardlock locations: 13.4 million gallons (2025) vs. 12.8 million gallons (2024) (+4.7% YoY)
• Fuel Margin per Gallon (proprietary): 49.0 cents (2025) vs. 46.0 cents (2024) (+6.5% YoY)
• Fuel Margin per Gallon (third-party): 17.4 cents (2025) vs. 13.1 cents (2024) (+32.8% YoY)
• Key Growth Drivers: Favorable diesel margins at proprietary cardlocks and improved margins at third-party cardlock locations due to the closure of underperforming sites. Operating income remained stable despite a decrease in fuel revenue and gallons sold, primarily due to movements in crude oil pricing and severe weather conditions.

Product Portfolio:

• Operation of proprietary and third-party cardlock locations.
• Issuance of proprietary fuel cards providing access to a nationwide network of fueling sites, truck stops, maintenance providers, and service locations. Diesel fuel accounts for approximately 80% of sales.

Market Dynamics:

• Competes against retail gas stations with high-flow diesel pumps and companies providing delivered fuels. ARKO Corp. leverages its cardlock footprint for easier access and efficient fueling for commercial vehicles.

GPMP Segment

Financial Performance:

• Revenue (external customers): $1.6 million (2025) vs. $4.5 million (2024) (-64.4% YoY)
• Operating Income: $92.9 million (2025) vs. $99.0 million (2024) (-6.2% YoY)
• Fuel Gallons Sold (external customers): 0.2 million (2025) vs. 1.0 million (2024) (-80.0% YoY)
• Fuel Margin per Gallon: 5.0 cents (2025) vs. 5.0 cents (2024) (0.0% YoY)
• Key Growth Drivers: Fuel margin decreased by $6.3 million primarily due to fewer gallons sold to the retail segment at a fixed margin.

Product Portfolio:

• Primarily engages in inter-segment wholesale distribution of fuel to substantially all of ARKO Corp.'s sites that sell fuel in the retail and wholesale segments. Sells fuel at cost plus a fixed margin (5.0 cents per gallon through December 31, 2025; 6.0 cents per gallon thereafter).

Market Dynamics:

• Not applicable for external market dynamics as it primarily serves inter-segment needs.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: $25.7 million (approximately 6.1 million shares) in 2025. The $125.0 million share repurchase program was exhausted during the quarter ended December 31, 2025.
• Dividend Payments: $13.6 million in 2025 ($0.12 per share of common stock).
• Dividend Yield: Not disclosed.
• Future Capital Return Commitments: A quarterly dividend of $0.03 per share of common stock was declared to be paid on March 20, 2026. Future declarations are at the discretion of the Board.

Balance Sheet Position:

• Cash and Equivalents: $305.0 million (as of December 31, 2025)
• Total Debt: $912.1 million (net of deferred financing costs, as of December 31, 2025)
• Net Cash Position: $(607.1) million (Total Debt - Cash and Equivalents)
• Credit Rating: Not disclosed.
• Debt Maturity Profile (as of December 31, 2025, in thousands):
  • 2026: $37,137
  • 2027: $9,191
  • 2028: $395,694
  • 2029: $453,298
  • 2030: $25,574
  • Thereafter: Not disclosed separately from 2030.

Cash Flow Generation:

• Operating Cash Flow: $192.6 million (2025)
• Free Cash Flow: Not explicitly disclosed.
• Cash Conversion Metrics: Rapid inventory turnover allows operations without large amounts of cash and working capital.

Operational Excellence

Production & Service Model: ARKO Corp.'s operational philosophy is centered on a multi-segment model that includes retail convenience stores, wholesale fuel distribution, and fleet fueling. Retail stores are operated centrally with consistent marketing, merchandising, and assortment strategies, while allowing for regional item offerings. The company emphasizes operational efficiencies through a common operating platform and a loyalty program. The Transformation Plan includes converting retail stores to dealer locations to leverage its wholesale platform and focus investments on remaining retail stores.

Supply Chain Architecture: Key Suppliers & Partners:

• Merchandise Distributor: Core-Mark (primary wholesale distributor).
• Direct Store Delivery Suppliers: Approximately 810 direct store delivery supplier distributors.
• Fuel Suppliers: Large, integrated oil companies and independent refiners, including Valero, Marathon, BP, Exxon, Shell, and Motiva.
• Transportation Providers: Primarily third-party transportation providers for motor fuel.
• Technology Partners: Not explicitly detailed, but relies on IT systems for daily operations, including fuel pricing, loyalty programs, payroll, accounting, budgeting, reporting, and site operations.

Facility Network:

• Retail Stores: 1,118 retail convenience stores as of December 31, 2025.
• Wholesale Dealer Locations: 2,099 dealer locations supplied with fuel as of December 31, 2025.
• Fleet Fueling Locations: 295 proprietary and third-party cardlock locations as of December 31, 2025.
• Owned Properties: 409 properties owned, including 212 retail stores, 52 consignment agent locations, 113 lessee-dealer locations, and 32 fleet fueling locations as of December 31, 2025.
• Leased Properties: Long-term control over 1,585 leased locations, including 906 retail stores, 136 consignment agent locations, 387 lessee-dealer locations, and 156 fleet fueling locations as of December 31, 2025.
• Research & Development: Not explicitly detailed as separate facilities, but innovation is driven by new store formats (fas craves) and loyalty program enhancements.
• Distribution: Fuel is transported from terminals to gas stations and cardlock locations by third-party providers, with a portion transported by ARKO Corp.'s own trucks.

Operational Metrics:

• Fuel gallons sold: 2,063.7 million (2025) vs. 2,189.2 million (2024) (-5.7% YoY).
• Fuel margin per gallon (consolidated): 27.1 cents (2025) vs. 26.8 cents (2024) (+1.1% YoY).
• Merchandise contribution: $499.8 million (2025) vs. $579.6 million (2024) (-13.7% YoY).
• Merchandise margin: 33.7% (2025) vs. 32.8% (2024) (+2.7% YoY).

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Operates its own chain of retail convenience stores.
• Channel Partners: Supplies fuel to third-party dealers and sub-wholesalers.
• Digital Platforms: Utilizes the fas REWARDS loyalty program app for promotions, personalized features, and member-only deals. The app is planned for relaunch in Q1 2026 with enhanced features.

Customer Portfolio: Enterprise Customers:

• Commercial and Municipal Entities: Served by the fleet fueling segment.
• Strategic Partnerships: Fuel supply agreements with major oil companies (Valero, Marathon, BP, Exxon, Shell, Motiva) and quick service national brands (Dunkin', Subway).
• Customer Concentration: Not explicitly quantified, but the company relies on a large number of store employees and a broad customer base across its retail, wholesale, and fleet fueling segments.

Geographic Revenue Distribution:

• All reportable segment revenues were generated from sites within the U.S.
• Operates in the District of Columbia and more than 30 states.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The retail convenience market, wholesale motor fuel distribution industry, and fleet fueling business are characterized by intense competition and fragmentation. The convenience store industry also faces competition from other retail sectors, including grocery stores, large warehouse retail stores, dollar stores, and pharmacies.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Large Chain Operators: 7-Eleven/Speedway, Circle K, Casey’s, Murphy USA, Quik Trip, Royal Farms, Sheetz, and Wawa.
• Individual Operators: Local convenience stores offering branded or non-branded fuel.
• Other Retail Sectors: Grocery stores, large warehouse retail stores (Costco, Wal-Mart), dollar stores (Family Dollar, Dollar General), and pharmacies (CVS, Walgreens).
• Fuel Distributors: Refiners that distribute their own products and other independent third-party motor fuel distributors.

Emerging Competitive Threats: New entrants, disruptive technologies (e.g., electric vehicles), and alternative solutions.

Competitive Response Strategy: ARKO Corp.'s Transformation Plan aims to enhance its competitive position through strategic acquisitions, conversion of retail stores to dealer locations, remodeling and NTI store development (e.g., fas craves), and organic growth initiatives in retail and fleet fueling. The company leverages its scale and management expertise to identify and integrate acquisitions and deploy growth strategies.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics:

• Economic Conditions: Changes in U.S. economic conditions, consumer confidence, and spending patterns (e.g., inflation, interest rates, unemployment) can negatively impact demand for fuel and merchandise.
• Trade Policy: Changes in U.S. tax or trade policy, including tariffs, could increase costs or reduce demand.
• Geopolitical Conflicts: The Russia-Ukraine War, Israel-Hamas War, and instability in Venezuela and Iran could lead to market volatility, supply chain disruptions, and adverse impacts on energy prices and margins.
• Acquisition/Divestiture Risks: Inability to identify suitable transactions, integrate acquired operations, realize anticipated benefits, or manage associated risks (diversion of management, disruption, loss of customers/employees, increased demands on systems).
• Dealerization Risks: Failure of the conversion of retail stores to dealer locations to yield anticipated benefits, or less favorable terms for new dealer fuel supply contracts.
• Growth Strategy Execution: Risks associated with upgrading, remodeling, and constructing NTI stores, including material/labor shortages, environmental issues, cost increases, and delays.
• Tobacco Consumption: Significant changes in consumption, regulations (e.g., flavored/menthol bans), taxes, or litigation related to cigarettes and other tobacco products (38% of merchandise revenue in 2025) could materially adversely affect the business.
• Motor Fuel Price Volatility: Changes in wholesale fuel prices, variable retail/consignment/cardlock margins, and market conditions can impact sales, margins, demand, and trade credit availability. Higher fuel prices increase credit card interchange fees.
• Demand for Fuel-Based Transportation: Developments in fuel-efficient engines, hybrid/electric vehicles, and alternative clean power systems, as well as government regulations aimed at reducing GHG emissions, could decrease demand for petroleum-based motor fuel.
• Competition: Intense competition from various retail and fuel distribution sectors could impact pricing, market share, and profitability if ARKO Corp. cannot successfully compete on location, price, brand, quality, and service.
• Branded Fuel Supplier Reputation: Negative events or developments associated with branded motor fuel suppliers could adversely impact fuel distribution volumes.

Operational & Execution Risks

Supply Chain Vulnerabilities:

• Supplier Dependency: Reliance on several principal suppliers for fuel and one major vendor for merchandise. Failure to renew contracts, supply disruptions, or significant changes in supplier relationships could materially impact product availability, quality, price, and costs.
• Transportation Dependency: Reliance on third-party transportation providers for most motor fuel. Disruptions in service (e.g., driver shortages, force majeure) could impact distribution.
• Capacity Constraints: Not explicitly detailed, but implied by growth strategies and potential for production bottlenecks.

Financial & Regulatory Risks

Market & Financial Risks:

• Variable Rate Debt: Approximately 50% of debt bore interest at variable rates as of December 31, 2025, exposing the company to fluctuations in interest rates and potentially higher debt service requirements.
• Debt Covenants: Agreements governing indebtedness contain various restrictions and financial covenants that may limit business and financing activities. Non-compliance could lead to accelerated debt payments.
• Insurance Coverage: Operations present risks that may not be fully covered by insurance, or policy limits/deductibles may be insufficient.
• Payment-Related Risks: Subject to evolving regulations and compliance requirements for credit/debit cards, interchange fees, and data security standards (PCI DSS). Failure to comply or data breaches could result in higher costs, fines, or inability to process payments.

Regulatory & Compliance Risks:

• Environmental Protection: Extensive federal, state, and local environmental, health, and safety laws and regulations related to fuel storage, transportation, and sale. Non-compliance can result in penalties, remedial obligations, or operational injunctions.
• General Regulatory Compliance: Subject to numerous federal, state, and local laws regarding sales of age-restricted products (alcohol, tobacco), food safety, gaming, employment laws (minimum wage, overtime), and data privacy. Non-compliance could lead to sanctions, fines, or license suspension/revocation.
• Tax Liabilities: Extensive tax liabilities imposed by multiple jurisdictions, subject to audits. Changes in tax laws (e.g., OECD Pillar Two, OBBB) could increase tax expenses.
• Data Privacy: Evolving laws, regulations, and contractual obligations related to data privacy and security. Failure to comply or security breaches could harm reputation, lead to fines, litigation, and increased costs.
• Intellectual Property: Failure to adequately secure, maintain, and enforce trademarks and other IP rights could lead to rebranding costs, litigation, or loss of competitive advantage. Reliance on licensed trademarks also carries risks of termination or non-renewal.

Geopolitical & External Risks

Geopolitical Exposure:

• Corporate Structure: Includes Israeli entities, potentially exposing the company to additional tax liabilities or challenges from Israeli tax authorities.
• Trade Relations: Impact of trade tensions and policy changes on sourcing and costs.
• Climate Change: Unfavorable seasonal weather or other climatic conditions (hurricanes, floods, blizzards) can adversely affect sales, increase costs, damage facilities, and disrupt supply chains. Climate change is expected to increase the frequency and intensity of such events.
• Sustainability Matters: Scrutiny from investors, customers, and policymakers regarding climate change, human capital, and other sustainability matters. Failure to align with expectations could result in reputational harm, loss of customers, or increased costs.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas:

• Foodservice Innovation: Development of the fas craves format, focusing on relevant, delicious, and affordable grab-and-go food and dispensed beverages.
• Loyalty Program Enhancement: Relaunch of the fas REWARDS loyalty program app in Q1 2026 with personalized features, easy enrollment, employee hub, store locators with individual member fuel pricing, Fueling America’s Future deals, value meals, age-verified offers, and gaming.
• EV Charging Infrastructure: Expansion of electric vehicle (EV) chargers at locations.
• Operational IT Systems: Reliance on multiple IT systems for fuel pricing, loyalty programs, payroll, accounting, budgeting, reporting, and site operations.

Intellectual Property Portfolio:

• Patent Strategy: Not explicitly detailed, but relies on trademarks, proprietary software, trade secrets, and other proprietary and confidential information.
• Trademarks: Owns and licenses numerous trademarks to protect its brands (e.g., 1-Stop, Admiral, Apple Market, fas mart, fas REWARDS) and identify fuel brands (Valero, Marathon, BP, Exxon, Shell) and quick service food offerings (Dunkin', Subway).
• Licensing Programs: Licenses various marks for branded fuels and quick service food offerings.
• IP Litigation: Not explicitly detailed, but general risk of third-party claims of infringement.

Technology Partnerships:

• Strategic Alliances: Partnerships with major fuel brands (ExxonMobil, Marathon, BP, Shell, Valero) and quick service restaurants (Dunkin', Subway) for branded offerings.
• Research Collaborations: Not explicitly detailed.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: The company emphasizes recruiting, training, and retaining qualified individuals, including through role-specific training programs and succession planning.

Board Composition: The Board has a Cybersecurity Special Committee, a subcommittee of the Audit Committee, consisting of four independent directors. This committee provides oversight on cybersecurity matters, including risk assessments, mitigation strategies, and emerging risks.

Human Capital Strategy

Workforce Composition:

• Total Employees: 9,748 as of December 31, 2025.
• Geographic Distribution: 8,438 employees in stores and 1,310 in corporate and field management positions.
• Skill Mix: Not explicitly detailed, but training programs focus on developing knowledge and skill sets for various roles, including customer service, food preparation, responsible marketing, and payment methods.

Talent Management: Acquisition & Retention:

• Hiring Strategy: Adopted mobile technology for applications, invested in additional recruiting resources, and implemented virtual recruiting and interviewing methods.
• Retention Metrics: Not explicitly disclosed, but the company looks to promote employee retention through competitive benefits and compensation.
• Employee Value Proposition: Provides employee benefits such as medical, dental, 401(k) retirement plan, and insurance. Evaluates wages and offers sign-on, retention, referral, and other bonus opportunities.

Diversity & Development:

• Diversity Metrics: Not explicitly disclosed.
• Development Programs: Offers various training programs, including on-the-job and structured training, supported by a Learning Management System (LMS). Role-specific training programs (targeted training programs) are designed to strengthen role clarity, enhance compliance, and accelerate readiness across key operational roles.
• Culture & Engagement: Emphasizes core values such as integrity, teamwork, and customer focus. Uses communication vehicles for company information and anonymous feedback.

Environmental & Social Impact

Environmental Commitments: Climate Strategy:

• Emissions Targets: Not explicitly detailed with specific Scope 1, 2, 3 reduction commitments or timelines.
• Carbon Neutrality: Not explicitly detailed with net-zero commitments or achievement milestones.
• Renewable Energy: Not explicitly detailed with clean energy adoption or sourcing strategies.
• Environmental Stewardship: Committed to compliance with applicable environmental laws and regulations, allocating capital expenditures for compliance and remediation ($3.3 million in 2025).

Supply Chain Sustainability:

• Supplier Engagement: Not explicitly detailed, but the company engages qualified environmental consultants and service providers for risk management.
• Responsible Sourcing: Not explicitly detailed.

Social Impact Initiatives:

• Community Investment: Not explicitly detailed, but the company's "Family of Community Brands" approach suggests local community presence.
• Product Impact: Not explicitly detailed, but the fas REWARDS loyalty program aims to provide value to customers.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: Business is seasonal, with operating income historically significantly greater in the warmer second and third quarters due to favorable climate and seasonal buying patterns.
• Economic Sensitivity: Operations are affected by changes in the U.S. macro-economic situation, consumer confidence, and spending patterns. Inflationary pressures reduce purchasing power, and high diesel fuel prices can reduce trucking business and fuel sales volume.
• Industry Cycles: The road transportation fuel and convenience business is generally driven by consumer preferences, road traffic growth, demand for trucking services, and travel/tourism trends.

Planning & Forecasting:

• Demand forecasting approach: Not explicitly detailed, but the company's operational strategies and Transformation Plan indicate active management of demand patterns.
• Inventory management: Rapid inventory turnover is a key operational aspect.
• Capacity planning: Not explicitly detailed, but NTI store development and remodels suggest ongoing capacity planning.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations:

• Fuel: Transportation, storage, and sale of petroleum products, including stringent environmental protection requirements. Subject to the Petroleum Marketing Practices Act for branded fuel relationships.
• Non-Fuel Products: Legal restrictions at federal, state, and local levels for the sale of food, alcohol, cigarettes and other tobacco products, lottery, ephedrine, menu labeling, video retention, money orders, money transfer services, and gaming.
• Environmental: Comprehensive framework of local, state, and federal environmental laws and regulations (e.g., CERCLA, RCRA, Clean Air Act, OSHA, HMTA, Energy Policy and Conservation Act) governing properties and operations, particularly underground fuel storage tanks (USTs).
• Employment: Federal and state laws governing minimum wage, overtime, rest breaks, working conditions, and employment eligibility.

Trade & Export Controls:

• Tariffs: U.S. government tariffs on foreign goods can impact costs and pricing.
• Sanctions & Export Controls: Not explicitly detailed beyond general geopolitical risks.

Legal Proceedings:

• Wage and Hour Collective Action Settlement: In March 2025, ARKO Corp. agreed to settle allegations regarding classification of store managers as exempt from overtime, accruing approximately $2.5 million for settlement fees, attorney fees, employer taxes, and administrative costs. The ultimate resolution is expected in Q3 2026.
• Other Legal Matters: Party to various routine legal actions in the ordinary course of business, not expected to have a material adverse impact.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: 21.8% (2025) vs. 22.8% (2024).
• Geographic Tax Planning: Corporate structure includes Israeli entities, which may expose the company to additional tax liabilities.
• Tax Reform Impact: The One Big Beautiful Bill Act (OBBB), signed into law on July 4, 2025, reinstated key income tax provisions (e.g., repeal of mandatory capitalization of R&D, extended 100% bonus depreciation, reinstituted EBITDA-based Section 163(j)). This resulted in a favorable impact on the timing of cash paid for taxes of $26.9 million for 2025, but no material impact on the effective tax rate for 2025.

Insurance & Risk Transfer

Risk Management Framework:

• ARKO Corp. maintains a comprehensive cybersecurity risk management framework, including third-party assessments, internal IT audits, governance oversight, and risk and compliance reviews.
• Environmental risk management involves direct interaction with environmental agencies and engagement of qualified environmental consultants.

Insurance Coverage:

• Maintains comprehensive insurance coverage against hazards and risks, but not all events may be fully insured or insurable, or liabilities may exceed policy limits or fall within deductibles.
• Subject to high deductibles, which may require substantial cash outlays for large claims.
• Participates in various state underground storage tank funds for reimbursement of remediation costs.