ARKO 10-K & 10-Q changes, risk factors and insider trading

You should carefully consider the risks described below, as well as other information contained in this Annual Report on Form 10-K, including the audited consolidated financial statements contained in Part II, Item 8 of this Annual Report on Form 10-K (the “Consolidated Financial Statements”) and the notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The occurrence ofIf any of the eventsfollowing discussedrisks below could significantly and adversely affectoccur, our business, prospects, results of operations, financial condition, and cash flows.flows could be materially and adversely affected. Some statements in this Annual Report on Form 10-K, including statements in the following risk factors, constitute forward-looking statements.

Our operations and the scope of services we provide are affected by changes in the macro-economic situation in the United States,U.S., which has a direct impact on consumer confidence and spending patterns. A number of key macro-economic factors, such as interest rates, inflationrates and unemployment, could have a negative effect on consumer habits and spending, and lead to lower demand for fuel and other products sold at our convenience stores. The U.S. economy has continued to experience inflationary pressures, which reduce consumer purchasing power. IfSignificant thisnegative trenddevelopments continuesin the macro-economic environment in the U.S. could have a material adverse effect on our business, financial condition and results of operations. Any major changes in tax or increases,trade itpolicy between the U.S. and countries from which we or our suppliers source merchandise and other products for our sites, such as the imposition of additional tariffs or duties on imported products, could negativelyrequire impactus demandto take certain actions, including raising prices on products we sell and seasonalseeking travelalternative patterns,sources whichof supply. Any of these actions could reduceadversely futureaffect salesour volumes.reputation and results of operations.

If our conversion of certain retail stores within our retail segment to dealer siteslocations within our wholesale segment does not result in the anticipated benefits of such conversion, then our growth may be negatively impacted and could adversely affect our results of operations and financial condition.

A part of our Transformation Plan includes the conversion of a meaningful number of retail stores within our retail segment to dealer siteslocations within our wholesale segment. The success of these conversions depends, in part, on our ability to realize the anticipated benefits from the related new dealer fuel supply contracts. If the terms of the new fuel supply contracts are not as favorable as we had anticipated, the anticipated benefits of such conversions may not be realized fully, if at all, or may take longer to realize than expected which could have a material adverse effect on our business, financial condition and results of operations. Additionally, we may lose certain economies of scale with respect to our purchasing power that are provided by the current scope of our retail operations.

During the year ended December 31, 2024,2025, fuel sales were approximately 79% of our total revenues and approximately 46%47% of our combined fuel, merchandise and other income margin. Generally, our retail fuel inventory on hand turns quickly in the ordinary course of our business. Our operating results are influenced by prices for motor fuel, variable retailretail, consignment and cardlock margins and the market for such products. Crude oil and domestic wholesale motor fuel markets are volatile. The margins we earn on our wholesale and fleet fueling segments’ sales, and the gallons of fuel we sell, are dependent on a number of factors outside our control, including the overall supply of refined products, overall market conditions, the demand for these products, competition from third parties, and the price of crude oil and domestic wholesale motor fuel. General political conditions, tariffs, trade wars, acts of war or terrorism and instability in oil producing regions, particularly in the Middle East, Russia, Africa and South America, could significantly affect crude oil supplies and wholesale fuel prices. Significant increases and volatility in wholesale fuel prices could result in substantial increases in the retail price of motor fuel products, lower fuel gross margin per gallon, lower demand for such products and lower sales to customers and dealers. This volatility makes it extremely difficult to predict the impact future wholesale cost fluctuations will have on our financial condition and results of operations. Increases in fuel prices generally compress retail fuel margin because fuel costs typically increase faster than retailers are able to pass them along to customers. In addition, when prices for motor fuel rise, some of our dealers may have insufficient credit to purchase motor fuel from us at their historical volumes. Furthermore, whenAs motor fuel prices decrease, so do our prompt payment incentives, which are generally calculated as a percentage of the total purchase price of the motor fuel distributed. Additionally, because the interchange fees we pay when credit cards are used to make purchases are based on transaction amounts, higher fuel prices at the pump result in higher credit card expenses. These additional fees increase operating expenses. Additionally, when diesel fuel prices rise, this results in higher truck shipping costs which causes shippers to consider alternative means for transporting freight, which may reduce trucking business and, in turn, may reduce our fuel sales volume. High diesel fuel prices may also cause our trucking customers to seek cost savings throughout their businesses, including measures which reduce total fuel consumption and may in turn reduce our fuel sales volume. Finally, higher prices for motor fuel may reduce our access to trade credit or worsen the terms under which such credit is available to us, which could have a material adverse effect on our financial condition and results of operations.distribute.

The road transportation fuel and convenience business is generally driven by consumer preferences, growth of road traffic, demand for trucking services, and trends in travel and tourism. Automotive, industrial and power generation manufacturers are developing more fuel-efficient engines, hybrid engines, electric vehicles and alternative clean power systems. Developments aimed at reducing greenhouse gas (“GHG”) emissions’ contribution to climate change may decrease the demand or increase the cost for our major product, petroleum-based motor fuel. Attitudes toward this product and its relationship to the environment may significantly affect our effectiveness in marketing our product and sales. Efforts to steer the public toward non-petroleum-based fuel dependent modes of transportation such as electric, hybrid, battery powered, hydrogen or other alternative fuel-powered motor vehicles may foster a negative perception toward motor fuel or increase costs for our product, thus affecting the public’s attitude toward our primary product. In 2024,2025, electric vehicles accounted for approximately 8.1%7.8% of all light vehicle sales in the United States. In addition, truck and other vehicle manufacturers and our customers continue to focus on ways to improve motor vehicle fuel efficiency and conserve fuel, including use of truck platooning, or the electronic linking of trucks with a lead vehicle, heat and kinetic energy recovery technologies, substantially lighter “super trucks” and higher efficiency motor fuels. In addition, there are government regulations at various levels of government aimed at reducing emissions and increasing fuel efficiency (e.g., ZEVEV mandatesmandates, fuel efficiency standards and low emission zones) and other factors to accelerate the transition to electric vehicles.vehicles, which could reduce demand for our products and services. Demand for trucking services in the U.S. generally reflects the amount of commercial activity in the U.S. economy. When the U.S. economy declines, demand for goods moved by trucks usually declines, and in turn demand for diesel fuel supplied by our fleet fueling segment typically declines, which could significantly harm our results of operations and financial condition. Significant developments in any of the above-listed factors could lead to substantial changes in the demand for petroleum-based fuel and have a material adverse effect on our business, financial condition and results of operations.

We depend on several principal suppliers for our fuel purchases, and we depend on one major vendor to supply a majority of our in-store merchandise. A significant disruption or operational failure affecting the operations of any of our suppliers, including its ability to providehave timelyadequate deliveries,supply at its fuel terminals, could materially impact the availability, quality and price of products and fuel soldwe at our sites,sell, cause us to incur substantial unanticipated costs and expenses, and adversely affect our business, financial condition and results of operations.

Our fuel supply agreements expire on various dates through June 2032. If any of our principal suppliers elects not to renew itstheir contracts with us, we may be unable to replace the volume of motor fuel we currently purchase from such supplier on similar terms or at all. We rely upon our suppliers to timely provide the volumes and types of motor fuels for which they contract. In times of extreme market demand, supply disruption or as a result of futures market and geopolitical conditions, we may be unable to acquire enough fuel, including diesel fuel in particular, to satisfy the demand of our customers. Most of the motor fuel we distribute is transported from terminals to gas stations and cardlock locations by third-party transportation providers. Such providers may suspend, reduce or terminate their obligations to us if certain events (such as force majeure) occur.occur, or may be subject to a shortage of drivers that results in a disruption in service. A change of key transportation providers, a disruption or cessation in services or supply provided by our providers, a significant change in our relationship with our suppliers or a significant accident or other incident involving a transportation provider could have a material adverse effect on our business, financial condition and results of operations.

A significant portion of our revenue is generated under fuel supply agreements with dealers. As these supply agreements expire, they must be renegotiated or replaced. Our fuel supply agreements generally have an initial term of 10 yearsyears. and, asAs of December 31, 2024,2025, had athe volume-weighted average remaining term offor our dealers was approximately 4.55.4 years. Our dealers have no obligation to renew their fuel supply agreements with us on similar terms or at all. We may be unable to renegotiate or replace our fuel supply agreements when they expire, and the terms of any renegotiated fuel supply agreements may not be as favorable as the terms of the agreements they replace. Whether these fuel supply agreements are successfully renegotiated or replaced is frequently subject to factors beyond our control. Such factors include fluctuations in motor fuel prices, a dealer’s ability to pay for or accept the contracted volumes and a competitive marketplace for the services offered by us. If we cannot successfully renegotiate or replace our fuel supply agreements, or must renegotiate or replace them on less favorable terms, revenues from these agreements could decline and our results of operations and financial condition could be adversely affected.

The retail sale, distribution, transportation and storage of motor fuels is subject to environmental protection and operational safety laws and regulationsregulations, business interruptions and inherent hazards and risks that may expose us orus, our customers or suppliers to significant costs and liabilities, which could have a material adverse effect on our business.

We and our facilities, particularly the operation of gas stations, and the storage, transportation and sale of fuel products, as well as the operations of our suppliers and customers, are subject to variousextensive federal, state and local environmental, health and safety laws, and regulations, in particular, those related to the quality of fuel products, the handling and disposal of hazardous wastes and the prevention and remediation of environmental contaminations. These continue to evolve and have generally become more stringent over time. We invest financial and managerial resources to comply with environmental laws and regulations and believe such investment will be necessary for the foreseeable future. Failure to comply with these laws and regulations may result in the assessment of administrative, civil, and criminal penalties, the imposition of remedial obligations, the issuance of orders enjoining our operations, or other claims and complaints. Additionally, our insurance and compliance costs may increase as a result of changes in environmental laws and regulations or changes in enforcement. These laws and regulations, as well as any new laws and regulations affecting fuel quality standards or the sale, distribution transportation and storage of motor fuels, have tended to become increasingly restrictive over time and could adversely affect our business and operating results by increasing our costs, limiting the demand for our products and services, or restricting our operations in the future. Most compliance costs are embedded in normal business operations. However, it is uncertain how much additional investment in technology, facilities, or increased operating costs will be necessary to address hazardous materials, environmental restoration, or new regulatory requirements.

Accidental leaksleaks, spills, or other releases have occurred at our facilities and spillsmay requiringcontinue cleanup mayto occur during businessour operations, potentially resulting in expenses for corrective actionsactions, which can be costly, or environmental investigations at our facilities, leased locations, or third-party sites we manage. ObligationsWe may also ariseface liability at non-company locationssites where our products have been handled or disposed of, particularly if prior practices—even if acceptable at the time—require remediation to meet current standards.

Where releases of motor fuels orfuels, other pollutants, substances or wastes have occurred, federal and state laws and regulations, and our lease agreements, require that contamination caused by such releases be assessed and remediated to meet applicable clean-up standards. Certain environmental laws impose strict, joint and several liability without regard to negligence or fault on current and former site owners and operators for costs required to clean-up and restore sites where motor fuels or other waste products have been disposed of or otherwise released. We may also be exposed to potential liability for personal injury or property damage caused by any release, spill, exposure or other accident involving such pollutants, substances or wastes. Private parties may also have the right to pursue legal actions to enforce compliance, as well as to seek damages for non-compliance, with environmental and safety laws and regulations or for personal injury or property damage. The costs associated with the investigation and remediation of contamination, as well as any associated third-party claims for damages or to impose corrective action obligations, could be substantial and could have a material adverse effect on us or our dealers.

Failure to comply with applicable laws and regulations could result in liabilities, penalties, costs, or license suspension or revocation that could have a material adverse effect on our business. In addition, future regulations, or more stringent enforcement of existing regulations, could increase those costs and liabilities, which could adversely affect our financial position and results of operations.

Our operations are subject to numerous federal, state and local laws and regulations, including regulations related to the sale of alcohol, cigarettes and other tobacco products, lottery products, other age-restricted products, operation of gaming machines, various food safety and product quality requirements, environmental laws and regulations, and various employment laws, including requirements for various licenses and registrations. To the extent we are not able to provide information that is required under such regulations because owners of our stock or our officers and directors do not provide the necessary documentation to comply or fail to comply with such regulations, we may have those licenses suspended or revoked, or new licenses may not be issued.

Our violation of, or inability to comply with, such regulations could expose us to regulatory sanctions ranging from criminal liability or monetary fines to the revocation or suspension of our permits and licenses for the sale of such products. We may also be subject to litigation including class action litigation which may result in substantial costs, expenses and damages related to legal proceedings. Such regulatory action or litigation could adversely affect our business, financial condition and results of operations.

We are dependent on ourthe ability to recruit, train and retain qualified individuals to manage our business. Economic factors, the state of the current labor market and availability of other employment options for our management personnel could impact our ability to recruit and retain qualified personnel that could have a material impact on our results of operations and impact our ability to execute upon our strategic goals. If we do not provide proper training and clear succession planning or are unable to entice the necessary talent to join our company and retain our employees over time, we may not have appropriate staff to be promoted to management roles as they become available. Additionally, we are dependent on certain key employees to operate our business and the loss of any of our executive officers or other key employees could harm our business.

Unfavorable seasonal weather or other climatic conditions could adversely affect our business.

Weather conditions have a significant effect on our sales, as retail customer transactions in higher profit margin products generally increase when weather conditions are favorable. Consequently, our results are seasonal, and we typically earn more during the warmer second and third quarters of the year. Severe weather phenomena, such as hurricanes, floods, and blizzards, may adversely affect our results of operations due to increased costs associated with such weather conditions, possible significant damage to our retailretail, sitesdealer and infrastructure,fleet fueling locations, and possible interruption of distributions to our retail, dealer sites and fleet fueling sites.locations. Temporary or long-term disruptions to our supply chain in connection with unfavorable weather conditions could impact our network of suppliers and distributors, significantly impacting the quality, variety and pricing of merchandise and fuel sold at our sites. Climate change is expected to increase the frequency and intensity of these and other weather phenomena, as well as contribute to various chronic changes (including in meteorological and hydrological patterns) which may result in similar risks or otherwise adversely impact our operations. While we may, from time to time, take actions to mitigate associated risks, we cannot guarantee that such efforts will be successful. For example, an increase in frequency and intensity of natural disasters may adversely impact the availability or cost of insurance

We and our dealers accept a variety of credit cards and debit cards in our convenience stores and at our fuel dispensers and, accordingly, we and our dealers are, and will continue to be, subject to significant and evolving regulations and compliance requirements, including obligations to implement enhanced authentication processes that could result in increased costs and liability and reduce the ease of use of certain payment methods. Additionally, we paypay, and in some cases pass-through, interchange and other fees, which may increase over time.

Europay, MasterCard and Visa, or EMV, is a global standard for credit cards that uses computer chips to authenticate and secure chip-card transactions. We aremay be liable for fraudulent credit card transactions at the fuel dispensers. As of December 31, 2024, due to2025, the requiredmajority time and cost necessary to upgrade each site, supply chain constraints related to necessary equipment, and contractor availability, we completed upgradingof our owned fuel dispensers to be EMV-compliant at approximately 79% of our retail locations, and anticipate being substantially complete during 2025. Accordingly, we may be subject to liability for fraudulent credit card transactions processed at fuel dispensers that are notwere EMV-compliant.

We rely on multiple information technology systems and a number of third-party vendor platforms (collectively, “IT Systems”) in order to run and manage our daily operations, including for fuel pricing, loyalty programs, payroll, accounting, budgeting, reporting, and storesite operations. Such IT Systems allow us to manage various aspects of our business, communicate with customers, and to provide reliable analytical information to our management. The future operation, success and growth of our business depends on streamlined processes made available through our uninhibited access to information systems, global communications, internet activity and other network processes. Like most other companies, despite our current cybersecurity risk management framework (see “Cybersecurity” for additional detail) and process controls, our IT Systems andSystems, those of our third-party service providers,providers and our customers, may be vulnerable to information security breaches, ransomware or extortion, mishandled data, acts of vandalism, computer viruses and interruption or loss of valuable business data. Stored data might be improperly accessed due to a variety of events beyond our control, including, but not limited to, damage and interruption from power loss or natural disasters, computer system and network failures, loss of telecommunications services, physical and electronic loss of access to data and information, terrorist attacks, hackers, security breaches or other security incidents, and computer viruses or attacks. We rely on third-parties to provide maintenance and support of our IT Systems, and to store our data (including customer data) and a failure of any of these third-parties to provide adequate and timely support, or compromise of these third-parties’ systems, could adversely affect the operation of our IT Systems. We have technology security initiatives and disaster recovery plans in place to mitigate our risk to these vulnerabilities, but these measures may not be adequately designed or implemented to ensure that our operations are not disrupted or the data security breaches do not occur.

Hackers and data thieves are increasingly sophisticated and operate large-scale and complex attacks which may remain undetected until after they occur. Such attacks also may be further enhanced in frequency or effectiveness through threat actors’ use of artificial intelligence. Any breach of our network or those of our vendors may result in damage to our reputation, the loss of valuable business data, the misappropriation of our valuable intellectual property or trade secret information, misappropriation of our customers’ or employees’ personal information, key personnel being unable to perform duties or communicate throughout the organization, loss of retail sales, significant costs for data restoration and other adverse impacts on our business. Despite our existing security procedures and controls, if our network or the network of one of our service providers was compromised, it could give rise to unwanted media attention, materially damage our customer relationships, harm our business, reputation, results of operations, cash flows and financial condition, result in fines or litigation, and may increase the costs we incur to protect against such information security breaches, such as increased investment in technology, the costs of compliance with consumer protection laws and costs resulting from consumer fraud. In addition, successful cyberattacks, data breaches, or data security incidents, at one of our vendors, other convenience store operators, large retailers or other market participants, whether or not we are directly impacted, could lead to a general loss of customer confidence or affect our supply chain which could negatively affect us, including harming the market perception of the effectiveness of our security measures or harming the reputation of the industry in general, which could result in reduced use of our products and services.

We rely on our trademarks and trade names to distinguish some of our products and services from those of our competitors, and have registered or applied to register many of these trademarks. We cannot assure you that our trademark applications will be approved. Third-parties may also oppose our trademark applications, or otherwise challenge our use of the trademarks. In the event that our trademarks are successfully challenged, we could be forced to rebrand our products or services, which could result in loss of brand recognition, and could require us to devote resources to advertising and marketing new brands. Further, we cannot assure you that competitors will not infringe our trademarks, or that we will have adequate resources to enforce our trademarks. Any claims of intellectual property infringement, even those without merit, could be expensive and time consuming to defend and divert management’s attention, cause us to cease making, licensing or using the products or services that incorporate the challenged intellectual property, require us to rebrand our products or services, if feasible, or require us to enter into royalty or licensing agreements in order to obtain the right to use a third-party’s intellectual property.

OurWe are subject to business interruption from unplanned events and asset age, and our operations present risks which may not be fully covered by insurance.

WeWhile carrywe maintain comprehensive insurance coverage against the hazards and risks underlying our operations.operations, not all events may be fully insured or insurable or, if covered, the financial amount of such liabilities may exceed our policy limits or fall within applicable deductible or retention limits. We believe our insurance policies are customary in the industry; however, some losses and liabilities associated with our operations may not be covered by our insurance policies. In addition, there can be no assurance that we will be able to obtain similar insurance coverage on favorable terms (or at all) in the future. Significant uninsured losses and liabilities could have a material adverse effect on our financial condition and results of operations. Furthermore, our insurance is subject to high deductibles. As a result, certain large claims, even if covered by insurance, may require a substantial cash outlay by us, which could have a material adverse effect on our financial condition and results of operations.

Certain of our outstanding term loans and revolving credit facilities bear interest at variable rates, subjecting us to fluctuations in the short-term interest rate. Beginning in early 2022, in response to significant and prolonged increases in inflation, the U.S. Federal Reserve Board raised interest rates eleven times during 2022 and 2023, which increased the borrowing costs on our variable rate debt. The Federal Reserve Board then paused rate increases in the fourth quarter of 2023 following the deceleration of inflationary growth. TheMore recently, the Federal Reserve Boardbegan cutan interesteasing ratescycle in September 2024 and has continued its policy rate, including additional cuts in December 2024,2024 and September, October and December 2025, and it may seek to further reduce interest rates, increase interest rates or maintain current interest rates. The timing, number and amount of any future interest rate changes are uncertain, and there can be no assurance that rates will continue to decrease at a rate currently predicted or at all, which would in turn negatively impact our borrowing costs. Any future federal fund rate increases could in turn make our financing activities, including those related to our acquisition activity, more costly and limit our ability to refinance existing debt when it matures or pay higher interest rates upon refinancing and increase interest expense on refinanced indebtedness. As of December 31, 2024,2025, approximately 49%50% of our debt bore interest at variable rates, which is based on CME Group’s forward-looking Secured Overnight Financing Rate (“SOFR”). Consequently, significant increases in market interest rates would create substantially higher debt service requirements, which could have a material adverse effect on our overall financial condition, including our ability to service our indebtedness.

Our corporate structure includes Israeli entities that file tax returns in Israel. Israeli tax authorities may challenge positions taken by such entities with respect to their tax returns. To the extent such a challenge is sustained, this could increase our worldwide effective tax rate and adversely impact our financial position and results of operations. In addition, tax law or regulations in Israel may be amended, and Israeli tax authorities may change their interpretations of existing tax law and regulations such that we may be subject to increased tax liabilities, including upon transfer, termination or liquidation of our Israeli entities. We may face additional tax liabilities in transferring cash through our Israeli entities by means of dividends or otherwise to support us, primarily due to withholding tax requirements imposed pursuant to the provisions of the Israeli tax law (which may be reduced under the provisions of the convention between the Government of the United States of America and the Government of Israel with respect to Taxes on Income), which could have a material adverse effect on our business, financial condition and results of operations.

Our amended and restated certificate of incorporationcharter designates specific courts as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ abilityabilities to obtain a favorable judicial forum for disputes with us.us or our directors, officers or employees.

Pursuant to ourOur amended and restated certificate of incorporation, as amended (our “charter”), provides that unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware isforum the sole and exclusive forum forto anythe statefullest extent permitted by law claim for (1) any derivative action or proceeding brought on our behalf;behalf, (2) any action asserting a claim of or based on a breach of a fiduciary duty owed by any director,of officerour directors, officers or other employee of oursemployees to us or our stockholders;stockholders, (3) any action asserting a claim against us or any of our directors or officers or other employees arising pursuant to any provision of the Delaware General Corporation Law,Law (“DGCL”) or, our charter or amended and restated certificate of incorporation or our bylaws; orbylaws, (4) any action asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware (or, if that court lacks subject matter jurisdiction, another federal or state court situated in the State of Delaware) (the “Delaware Forum Provision”). The Delaware Forum Provision will not apply to any causes of action arising under the Securities Act or the Exchange Act. Our amended and restated certificate of incorporationcharter further provides that unless we consent in writing to the selection of an alternative forum, the Unitedfederal Statesdistrict court for the District Court inof Delaware shallshall, to the fullest extent permitted by law, be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act and the Exchange Act (the “Federal Forum Provision”). In addition, our amended and restated certificate of incorporation provides that anyAny person or entity purchasing or otherwise acquiring any interest in shares of commonour capital stock isshall be deemed to have notice of and consented to thethis Delaware Forum Provision and the Federal Forum Provision; provided, however, that stockholders cannot and will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.provision.

Our retail segment includes the operation of a chain of retail stores, which includes convenience stores selling fuel products and merchandise to retail customers.customers, from which we generate a significant portion of our revenue and a large proportion of our profitability. At our convenience stores, we own the merchandise and fuel inventory and employ personnel to manage the store.

Our GPMP segment primarily engages in theinter-segment transactions of wholesale distribution of fuel to substantially all of our sites that sell fuel in the retail and wholesale segments. GPMOur PetroleumGPMP LP (“GPMP”)segment sells and supplies fuel at GPMP’sits cost of fuel (including taxes and transportation) plus a fixed margin to such supplied sites and charges aan inter-segment fixed fee primarily to sites in the fleet fueling segment which are not supplied by GPMP.the GPMP segment. The effect of these inter-segment transactions was eliminated in the Consolidated Financial Statements.

Multi-Year2025 Transformation Plan Updates and Initiatives

LeveragingStarting in the middle of 2024, as part of our Transformation Plan, we are leveraging our unique, multi-segment operating model throughto moreexpand activeour conversionwholesale fuel distribution network by converting a meaningful number of retail stores within our retail segment to dealer siteslocations within our wholesale segment. Following our review of our retail store portfolio, we have identified and expect to convert a meaningful number of retail locations to dealer sites, which we expect will yield greater profitability. Conversions of certain retail stores benefit both our dealersretail and us.wholesale Dealerssegments, areas ablethese sites have yielded, and we expect will continue to leverageyield, theirgreater ownprofitability scaleonce byconverted. takingIn additionalsuch sites, whilecases, we realize higher profit from ongoing fuel supply agreements and rental income than from continuingcontinued tooperation operateof these stores in our retail segment. These conversions also will allow us to focus on and better prioritize future investments in our remaining retail stores. During the year ended December 31, 2024,2025, we converted 153256 retail stores to dealer sites,locations, and we have converted a total of 409 stores since the beginning of this initiative in the middle of 2024. We expect to convert a meaningful number of additional stores throughout 2025,2026. includingThese anotherconversions have resulted in approximately 100$11.8 retailmillion storesin byincremental operating income before general and administrative expenses for the endyear ofended theDecember first quarter of31, 2025.

As we proceed with thisour Transformation Plan, we may incur associated non-recurring expenses, including personnel costs, divestiture costs, professional services fees, and losses on disposal of assets and impairment charges.

We achieved strong store growth over the last decade, driven primarily by a highly successful acquisition strategy, inclusive of 26 completed acquisitions from 2013 through 2024.2025. Most recently, onIn April 9, 2024, we completed our acquisition of 21 SpeedyQ Markets convenience stores located in Michigan (the “SpeedyQ Acquisition”). In March 2023, we acquired 135 convenience stores, 181 dealer locations, a commercial, government, and industrial business, and certain distribution and transportation assets from Transit Energy Group, LLC (the “TEG Acquisition”). In June 2023, we completed our acquisition of 24 Uncle’s convenience stores located across Western Texas, 68 proprietary GASCARD-branded cardlock sites and 43 private cardlock sites for fleet fueling operations located in Western Texas and Southeastern New Mexico from WTG Fuels Holdings, LLC (the “WTG Acquisition”). In August 2023, we acquired seven Speedy’s convenience stores located in Arkansas and Oklahoma, which were previously locations operated by a dealer to which we supplied fuel (the “Speedy’s Acquisition” and, together with the TEG Acquisition and the WTG Acquisition, the “2023 Acquisitions”). InOur Julystrategic 2022,acquisitions, weas completedwell ouras acquisitionthe conversion of certaina assetsmeaningful fromnumber Quarlesof Petroleum,retail Incorporatedstores (the “Quarles Acquisition”), which included on the acquisition date 121 proprietary Quarles-branded cardlock sites and 63 third-party cardlock sites for fleet fueling operations, and 46to dealer locations, and in December 2022, we completed our acquisition of Pride Convenience Holdings, LLC, which operated 31 Pride convenience stores on the acquisition date and had one store under construction that is now opened (the “Pride Acquisition” and together with the Quarles Acquisition, the “2022 Acquisitions”). Our strategic acquisitions have had, and may continue to have, a significant impact on our reported resultsresults, andwhich can make period to period comparisons of results difficult. We believe our significant size and scale aids our efforts to successfully deploy our organic growth strategies in our acquired assets, which we anticipate will result in value accretion. For additional information regarding our acquisitions, see Note 4 to the Consolidated Financial Statements.

Our store count has grown from 320 sites in 2011 to 3,5913,512 sites as of December 31, 2024,2025, of which 1,3891,118 were operated as retail convenience stores, 1,9222,099 were dealer locations to which we supplied fuel, and 280295 were cardlock locations. The following tables provide a history of our acquisitions, site conversions and site closings, including as part of our Transformation Plan, for each of the last three years, for the retail, wholesale and fleet fueling segments:

The cost of our main products, gasoline and diesel fuel, is greatly impacted by the wholesale cost of fuel in the United States. We pass wholesale fuel cost changes to our fuel supply dealers and attempt to pass wholesale fuel cost changes to our retail, fleet fueling and consignment customers through retail price changes; however, we are not always able to do so. Competitive conditions primarily affectdrive the timing of any related increaseincreases or decreasedecreases in retail prices. AsFuel amargins result,for our retail stores, our fleet fueling sites and consignment locations can change rapidly because they are influenced by many factors, including: the wholesale cost of fuel; interruptions in supply caused by severe weather; supply chain disruptions; refinery mechanical failures; and competition in the local markets in which we operate. We tend to experiencerealize lower fuel margins when the cost of fuel is increasing gradually over a longer period and higher fuel margins when the cost of fuel is declining or more volatile over a shorter period of time. Depending on futureBecause market and geopolitical conditions,conditions constrain, from time to time, the supply of fuel, including diesel fuel in particular, may become constrained. Accordingly, we maintain terminal storage of diesel fuel for short-term supply needs for our fleet fueling sites.

Additionally, the significant increase in the rate of inflation in the U.S. in recent years and the effect of higher prevailing interest rates hashave increased merchandise cost and reduced consumer purchasing power. We have mitigated the impact of a portion of these higher costs on operating results with retail price increases. The persistence of, or increase in, inflation or high interest rates could negatively impact the demand for our products and services, including due to consumers reducing travel, which could reduce sales volumes. Because of recent and current labor market conditions and the prevailing wage rates in the markets in which we operate, we have increased wages, which has increasedincreased, and may continue to increase, our costs associated with recruiting and retaining qualified personnel, and may continue to do so in the future.personnel. Additionally, any major changes in tax or trade policy between the U.S. and countries from which we or our suppliers source merchandise and other products for our sites, such as the imposition of additional tariffs or duties on imported products, could require usthat towe take certain actions, including raising prices on products we sell and seeking alternative sources of supply. Further, any major changes could lead to significant cost increases and delays in opening remodeled or new convenience stores or other improvements to our sites.

We also operate in a highly competitive retail convenience market that includes businesses with operations and services that are similar to those that we provide. We believe that convenience stores managed by individual operators whothat offer branded or non-branded fuel are also significant competitors in the local markets in which we operate. Often, operators of both chains and individual stores compete by selling unbranded fuel at lower retail prices relative to the market. The convenience store industry is also experiencing competition from other retail sectors including grocery stores, large warehouse retail stores, dollar stores and pharmacies.

The period-to-period comparisons of our results of operations contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operation have been prepared using the Consolidated Financial Statements and the notes thereto, and the following discussion should be read in conjunction with such Consolidated Financial Statements and related notes contained elsewhere in this Annual Report on Form 10-K. All figures for fuel costs, fuel contribution and fuel margin per gallon exclude the estimated fixed margin or fixed fee paid to the GPMP segment for the cost of fuel (intercompany charges by the GPMP segment).

For the year ended December 31, 2024,2025, fuel revenue decreased by $605.5$820.0 million, or 8.1%,12.0%, compared to the year ended December 31, 2023.2024. The decrease in fuel revenue was attributable primarily to a decrease in the average price of fuel compared to 20232024 and fewer gallons sold at same stores in 20242025 compared to 2023,2024, due to a challenging macroeconomic environment, as well as severe weather conditions in January and February 2025 in certain of the markets in which waswe partially offset by incremental gallons sold related to the 2023 Acquisitions and the SpeedyQ Acquisition.operate.

For the year ended December 31, 2024,2025, merchandise revenue decreased by $70.7$284.9 million, or 3.8%,16.1%, compared to the year ended December 31, 2023,2024, primarily due to a decrease in same store merchandise revenues and a decrease inreduced merchandise revenue from underperforming retail stores that we closed or converted to dealers.dealer Offsettinglocations thissince the middle of 2024 as well as a decrease wasin additionalsame store merchandise revenue from the 2023 Acquisitions and the SpeedyQ Acquisition.revenues.

For the year ended December 31, 2024,2025, other expenses,revenues, net decreasedincreased by $4.9$16.4 million, or 38.3%,15.5%, compared to the year ended December 31, 20232024, primarily due to lowerthe acquisitionnet andimpact divestitureof costs.additional income from retail stores that we converted to dealer locations since the middle of 2024.

For the year ended December 31, 2025, general and administrative expenses increased by $2.8 million, or 1.7%, compared to the year ended December 31, 2024, Adjustedpartially EBITDA was $248.9 million, as compareddue to $276.3an increase of $2.8 million forin theshare-based yearcompensation ended December 31, 2023. Refer to “Use of Non-GAAP Measures” below for discussion of this non-GAAP performance measure and related reconciliation to net income.expense.

For the year ended December 31, 20232025, depreciation and amortization expenses increased by $2.0 million, or 1.5%, compared to the year ended December 31, 20222024 primarily due to assets acquired in the past year.

Based in Richmond, Virginia, ARKO Corp. is one of the largest operators of convenience stores in the United States (“U.S.”), ranked by store count, operating 1,0791,057 retail convenience stores as of MarchJune 31,30, 2026. We are also one of the largest wholesalers of fuel by gallons in the U.S. As of MarchJune 31,30, 2026, we supplied fuel to 2,1262,129 dealer locations and operated 292290 proprietary and third-party cardlock locations (unstaffed fueling locations). We are well diversified geographically and as of MarchJune 31,30, 2026, operated in the District of Columbia and more than 30 states in the Mid-Atlantic, Midwestern, Northeastern, Southeastern and Southwestern U.S. We own 100% of GPM Investments, LLC, a Delaware limited liability company (“GPM”), which was our primary operating entity until the closing of the initial public offering of the Class A common stock of our subsidiary ARKO Petroleum Corp., a Delaware corporation (“APC”), on February 13, 2026 (the “APC IPO”), after which GPM became our primary operating entity for our retail segment, and APC became our primary operating entity for our wholesale, fleet fueling and GPMP segments. We own 73.6% of the economic interests and 93.3% of the combined voting power of APC. APC’s Class A common stock began trading on the Nasdaq under the symbol “APC” on February 12, 2026.

As of MarchJune 31,30, 2026, we operated the stores under more than 25 regional store brands including 1-Stop, Admiral, Apple Market®, BreadBox, Corner Mart, Dixie Mart, ExpressStop, E-Z Mart®, fas mart®, fastmarket®, Flash Market, Handy Mart, Jetz, Jiffi Stop®, Jiffy Stop, Li’l Cricket, Market Express, Next Door Store®, Pride, Roadrunner Markets, Rose Mart, Rstore, Scotchman®, shore stop®, Speedy’s, SpeedyQ, Town Star, Uncle’s, Village Pantry® and Young’s.

Our multi-year transformation plan (the “Transformation Plan”) includes targeted capital allocation toward strategic sub-segments of our retail stores, with the goal of increasing traffic and improving profitability. In June of 2025, we launched our new format fas craves flagship location showcasing our key strategic priority to offer food that is relevant, delicious, and affordable and do so within stores that are completely remodeled with modernized interior and exterior designs, with layouts intended to provide a strong focus on our food offerings. fas craves food elevates our assortment of hot and cold grab-and-go food and dispensed beverages. The new fas craves format stores are designed to elevate the customer experience and better reflect our commitment to foodservice, convenience, efficiency, and value. Since the launch of our flagship location, we have completed several additional remodels and have approximately 25 additional remodels planned, all which feature the fas craves food and beverage elements. We also plan to expand components of fas craves food and beverage to certain non-remodel stores where space permits prior to remodeling.

We are targeting opening 20 NTInew fleet fueling locations during 2026, of which one opened in March 2026, two opened in July 2026, and 17 of which are in process. We anticipate that these NTInew fleet fueling locations will have a positive impact on our results of operations given the attractive, durable cash flow profile of our fleet fueling business.

As of MarchJune 31,30, 2026, we had approximately 2.52.6 million enrolled members in our fas REWARDS loyalty program, representing a year over year increase of approximately 6.8%9.9% from the end of the firstsecond quarter of 2025. Our fas REWARDS loyalty program is available in all of our retail stores and offers enrolled loyalty members the most value in our stores, in-app member only deals not available without the app, and the ability to earn points that can be redeemed for either fuel or merchandise savings. Other in-app features include the ability to convert earned points to fas BUCKS, which can be spent like cash on most merchandise categories in our stores, and, as part of our Fueling America’s Future promotion, stackable fuel cents off up to $2.50 off per gallon (up to 20 gallons) to celebrate America’s 250th anniversary in 2026.

Starting in the middle of 2024, as part of our Transformation Plan, we commenced leveraging our unique, multi-segment operating model to expand our wholesale fuel distribution network by converting a meaningful number of retail stores within our retail segment to dealer locations within our wholesale segment. Conversions of certain retail stores benefit both our retail and wholesale segments, as these sites have yielded, and we expect will continue to yield, greater profitability once converted. In such cases, we realize higher profit from ongoing fuel supply agreements and rental income than from continued operation of these stores in our retail segment. These conversions also allow us to focus on and better prioritize future investments in our remaining retail stores. During the three months ended MarchJune 31,30, 2026, we converted 4121 retail stores to dealer locations,locations and we have convertedfor a total of 45062 stores converted during the six months ended June 30, 2026 and a total of 471 stores converted since the beginning of this initiative. We expect to continue to convert a meaningful number of additional stores throughout 2026.2026 and into 2027. These conversions have resulted in approximately $5.7$2.7 million, $8.4 million and $13.0$15.6 million in incremental operating income before general and administrative expenses for the three monthsmonth, six month, and 12-month periods ended MarchJune 31, 2026 and the 12-month period ended March 31,30, 2026, respectively.

We achieved strong store growth over the last decade, driven primarily by a highly successful acquisition strategy, inclusive of 26 completed acquisitions from 2013 through MarchJune 31,30, 2026. Our strategic acquisitions, as well as the conversion of a meaningful number of retail stores to dealer locations, have had, and may continue to have, a significant impact on our reported results, which can make period to period comparisons difficult.

The cost of our main products, gasoline and diesel fuel, is greatly impacted by the wholesale cost of fuel in the U.S. Fuel margins for our retail stores, our fleet fueling siteslocations and consignment agent locations can change rapidly because they are influenced by many factors, including: the wholesale cost of fuel; interruptions in supply caused by severe weather; supply chain disruptions; refinery mechanical failures; and competition in the local markets in which we operate. We pass wholesale fuel cost changes to our fuel supply dealers and attempt to pass wholesale fuel cost changes to our retail, fleet fueling and consignment customers through price changes; however, we are not always able to do so. We tend to realize lower fuel margins when the cost of fuel increases gradually over a longer period and higher fuel margins when the cost of fuel declines or is more volatile over a shorter period.

During the quarterfirst endedhalf March 31,of 2026, global crude oil and refined product markets were impacted by heightened geopolitical tensions in the Middle East, including the ongoing conflict involving Iran, Israel, and the United States. These developments contributed to significant volatility in crude oil prices and periodic supply disruptions, particularlyincluding relateddisruptions to the disruption of shipping through the Strait of Hormuz. AsDuring athe result,second quarter of 2026, market conditions remained highly dynamic as developments related to the conflict, including sporadic reopenings of the Strait of Hormuz and the resumption of oil flows, contributed to fluctuations in crude oil prices and changing expectations regarding global supply availability. These market conditions contributed to variability in wholesale fuel costs increased during the period, leading to highercosts, retail gasoline pricesprices, and greaterfuel pricedemand andpatterns volume volatility inacross many of our markets. While retail price increases generally lag behind changes in wholesale costs, the magnitude and timing of the fluctuations during the quartersix months ended MarchJune 31,30, 2026,2026 positively affected fuel margins during thethat quarter.period. However, continued geopolitical uncertainty and evolving global supply dynamics may continue to contribute to volatility in fuel prices and margins in future periods.

We continually monitor market conditions and adjust pricing strategies in response to changes in commodity costs, competitive dynamics, and consumer demand. Continued geopolitical uncertainty may result in ongoing volatility in fuel costs and margins in future periods. Because market and geopolitical conditions from time to time constrain the supply of fuel, including diesel fuel in particular, we maintain terminal storage of diesel fuel for short-term supply needs for our fleet fueling sites.

We also operate in a highly competitive retail convenience market that includes businesses with operations and services that are similar to those that we provide. We believe that convenience stores managed by individual operators that offer branded or non-branded fuel are also significant competitors in the local markets in which we operate. Often, operators of both chains and individual stores compete by selling unbranded fuel at lower retail prices relative to the market. The convenience store industry is also experiencingsubject to competition from other retail sectors including grocery stores, large warehouse retail stores, dollar stores and pharmacies.

Results of Operations for the three and six months ended MarchJune 31,30, 2026 and 2025

The table below shows our consolidated results for the three and six months ended MarchJune 31,30, 2026 and 2025, together with certain key metrics.

4 Refer to “Use of Non-GAAP Measures” below for discussion of this non-GAAP performance measure and related reconciliation to net loss.income.

For the three months ended MarchJune 31,30, 2026, fuel revenue decreasedincreased by $12.8$396.9 million, or 0.9%,25.3%, compared to the firstsecond quarter of 2025. The decreaseincrease in fuel revenue was attributable primarily to fewer gallons sold in the first quarter of 2026 compared to the first quarter of 2025 due to a challenging macroeconomic environment as well as severe weather conditions in the quarter in several markets in which we operate, partially offset by an increase in average price of fuel compared to the firstsecond quarter of 2025.2025, partially offset by fewer gallons sold in the second quarter of 2026 compared to the second quarter of 2025 due to a challenging macroeconomic environment.

For the three months ended MarchJune 31,30, 2026, merchandise revenue decreased by $49.1$52.7 million, or 13.8%,13.2%, compared to the firstsecond quarter of 2025, primarily due to a decrease in merchandise revenue from retail stores that we closed or converted to dealer locations and severe weather conditions in the quarter in several markets in which we operate,locations, as well as a slight decrease in same store merchandise revenues.

For the three months ended MarchJune 31,30, 2026, other revenues, net increased by $4.3$3.3 million, or 15.6%,11.2%, compared to the firstsecond quarter of 2025, primarily due to the net impact of additional income from retail stores that we converted to dealer locations.

For the three months ended MarchJune 31,30, 2026, total operating expenses decreasedincreased by $81.2$353.7 million compared to the firstsecond quarter of 2025. Fuel costs decreasedincreased $24.9$404.9 million, or 1.9%,28.6%, compared to the firstsecond quarter of 2025, andwhich were partially offset by a decrease in merchandise costs decreasedof $35.0$38.7 million, or 14.8%,14.6%, compared to the firstsecond quarter of 2025, consistent with the reductionchanges in fuel and merchandise revenues. For the three months ended MarchJune 31,30, 2026, site operating expenses decreased $17.2$14.0 million, or 8.6%,6.9%, compared to the firstsecond quarter of 2025 primarily due to lower expenses from retail stores that we closed or converted to dealer locations, which were partially offset by an increase in same store expenses.

For the three months ended MarchJune 31,30, 2026, othergeneral expenses,and netadministrative expenses increased $1.8$3.0 million, or 7.3%, compared to the firstsecond quarter of 20252025, primarily due to higherincreased acquisitionsshare-based andcompensation divestiture costs and costs associated with the APC IPOexpense in the firstsecond quarter of 2026.

For the three months ended MarchJune 31,30, 2026,2026 incomeand tax2025, benefitdepreciation wasand $2.5amortization millionexpenses decreased $1.4 million, or 4.3%, compared to $12.9 million for the threesecond monthsquarter ended March 31,of 2025.

For the three months ended MarchJune 31,30, 2026 and 2025, net lossincome was $5.6$9.4 million and $12.7$20.1 million, respectively.

For the three months ended MarchJune 31,30, 2026 and 2025, net lossincome attributable to the Company was $6.6$6.1 million and $12.7$20.1 million, respectively.

For the three months ended MarchJune 31,30, 2026 and 2025, Adjusted EBITDA was $50.9$72.0 million and $30.9$76.9 million, respectively. Refer to “Use of Non-GAAP Measures” below for discussion of this non-GAAP performance measure and related reconciliation to net loss.income.

The table below shows the results of the retail segment for the three and six months ended MarchJune 31,30, 2026 and 2025, together with certain key metrics for the segment.

For the three months ended MarchJune 31,30, 2026, fuel revenue decreasedincreased by $63.6$118.9 million, or 9.2%,15.9%, compared to the firstsecond quarter of 2025. The decreaseincrease in fuel revenue was attributable to a $1.12 per gallon increase in the average retail price of fuel in the second quarter of 2026 compared to the second quarter of 2025, primarily due to market factors. This increase was partially offset by a decrease of 25.025.1 million gallons from retail stores that we closed or converted to dealer locations, as well as a decrease in same store gallons sold of 3.2%,5.7%, or 6.312.0 million gallons, reflecting the challenging macroeconomic environment asincluding well as severe weather conditions in the quarter in several markets in which we operate. These decreases were partially offset by a $0.15 per gallon increase in the averagehigh retail pricegas of fuel in the first quarter of 2026 compared to the first quarter of 2025, primarily due to market factors.prices.

For the three months ended MarchJune 31,30, 2026, merchandise revenue decreased by $49.1$52.7 million, or 13.8%,13.2%, compared to the firstsecond quarter of 2025, primarily due to a decrease in merchandise revenue of $48.0$48.7 million from retail stores that we closed or converted to dealer locations as well as severe weather conditions in the quarter in several markets in which we operate.locations. Same store merchandise sales decreased $1.6$6.0 million, or 0.5%,1.7%, for the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025, and same store merchandise sales excluding cigarettes returned to growth forreflecting the firstchallenging time in two years, reflecting improved execution, sharper promotions,macroeconomic and strongersoft customerconsumer engagement.environment. TheMore than half of the decline in same store merchandise revenue was caused primarily by lower revenues from cigarettes.

For the three months ended MarchJune 31,30, 2026, other revenues, net decreased by $1.9$1.7 million, or 12.7%,11.7%, compared to the firstsecond quarter of 2025, due to a decrease in other revenues from retail stores that we closed or converted to dealer locations.

For the three months ended MarchJune 31,30, 2026, sitefuel operating expensescontribution decreased by $21.4$8.4 million, or 12.1%,7.8%, compared to the firstsecond quarter of 2025, primarily due to $26.7a $9.3 million ofdecrease reducedin expensesfuel contribution related to retail stores that we closed or converted to dealer locations,locations compared to the second quarter of 2025, which was partially offset by an increase ina same store operatingfuel expensescontribution increase of $4.8$0.5 million, or 3.3%, primarily due to higher personnel costs, credit card fees, utilities and rent.0.5%.