ARKO Petroleum Corp. (APC): Results of Operations and Financial Condition
ARKO Petroleum Corp. (APC) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 ARKO Petroleum Corp. Reports Second Quarter 2026 Results ~ Signs Agreement to Acquire a Vertically Integrated Fuel Supply and Distribution Platform ~ ARKO Petroleum Corp. (Nasdaq: APC) (“APC” or the “Company”), one of the largest wholesale fuel distributors in the Un
How this was made
The 30-second read
Why it matters
APC’s disclosed Q2 performance and reaffirmed full-year guidance provide a baseline for cash generation, while the USPP acquisition adds volume growth, terminals, and transportation capabilities with stated annual Adjusted EBITDA accretion.
Market read
Traders can reprice APC on the combination of fresh quarterly metrics, reaffirmed guidance, and a detailed, accretive acquisition with specific consideration and performance-based escrow mechanics.
What to watch
Escrowed $30M of APC Class A shares is contingent on EBITDA targets in the first four quarters post-closing, creating execution risk and potential dilution/valuation sensitivity if targets slip.
ARKO Petroleum Corp. Reports Second Quarter 2026 Results; Signs Agreement to Acquire a Vertically Integrated Fuel Supply and Distribution Platform
Net income, Adjusted EBITDA and Discretionary Cash Flow increased from the year-ago quarter, supported by wholesale conversions and higher GPMP fixed margins. Operating cash flow declined, fleet-fueling contribution fell, and comparable wholesale-site operating income was reduced.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net incomeGAAP | $12.2 million | – | – |
| Adjusted EBITDAnon-GAAP | $39.8 million | – | – |
| Net cash provided by operating activitiesGAAP | $10.4 million | – | – |
| Discretionary Cash Flownon-GAAP | $27.1 million | – | – |
| Wholesale fuel gallons sold - fuel supply locationsother | 203,578 | – | – |
| Wholesale fuel gallons sold - consignment agent locationsother | 37,183 | – | – |
| Wholesale fuel contribution - fuel supply locationsother | $ 15,511 | – | – |
| Wholesale fuel contribution - consignment agent locationsother | $ 10,810 | – | – |
| Wholesale fuel margin, cents per gallon - fuel supply locationsother | 7.6 | – | – |
| Wholesale fuel margin, cents per gallon - consignment agent locationsother | 29.1 | – | – |
| Fleet Fueling fuel gallons sold - proprietary cardlock locationsother | 32,703 | – | – |
| Fleet Fueling fuel gallons sold - third-party cardlock locationsother | 3,713 | – | – |
| Fleet Fueling fuel contribution - proprietary cardlock locationsother | $ 16,755 | – | – |
| Fleet Fueling fuel contribution - third-party cardlock locationsother | $ 330 | – | – |
| Fleet Fueling fuel margin, cents per gallon - proprietary cardlock locationsother | 51.2 | – | – |
| Fleet Fueling fuel margin, cents per gallon - third-party cardlock locationsother | 9.0 | – | – |
| GPMP fuel gallons sold - inter-segmentother | 277,313 | – | – |
| GPMP fuel gallons sold - related party locationsother | 191,395 | – | – |
| GPMP fuel contribution - related party locationsother | $ 11,458 | – | – |
| GPMP fuel margin, cents per gallon - related party locationsother | 6.0 | – | – |
| Maintenance capital expendituresother | $2.7 million | – | – |
| Growth capital expendituresother | $7.1 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Wholesale SegmentWholesale operating income increased by $1.6 million compared to the second quarter of 2025, driven by additional operating income from ARKO Retail Sites converted to dealer locations and partly offset by reduced operating income at comparable wholesale sites. | not reported | – | – |
| Fleet Fueling SegmentFuel contribution decreased by $0.7 million compared to the second quarter of 2025, primarily due to higher than average fuel margins in the prior year and margin compression as indexed prices declined more quickly than weighted average inventory cost. | not reported | – | – |
| GPMP SegmentFuel revenue from related parties increased primarily because average fuel prices were higher, partly offset by a 33.9 million, or 15.1%, decrease in gallons sold. Related-party fuel contribution increased by $0.2 million as fixed margin rose from 5.0 cents per gallon sold to 6.0 cents per gallon sold. | not reported | – | increased by $111.9 million, or 18.5% |
Capital returns
- The Board of Directors declared a quarterly dividend of $0.50 per share of common stock to be paid on August 28, 2026 to stockholders of record as of August 18, 2026.
- The quarterly dividend is consistent with an expected annual dividend rate of $2.00 per share.
What drove it
- Twenty-one ARKO retail convenience stores that sell fuel were converted to dealer locations during the second quarter of 2026, bringing total conversions since program inception in 2024 to 471 sites.
- Fuel contribution at wholesale fuel supply locations increased by $2.0 million due to incremental contribution from ARKO Retail Sites converted to dealer locations.
- Wholesale other revenues, net increased by $4.5 million and site operating expenses increased by $4.2 million, primarily from ARKO Retail Sites converted to dealer locations.
- The Company is targeting opening 20 new fleet fueling locations in 2026. One opened in March 2026, two opened in July 2026, and 17 are in process.
- The proposed USPP acquisition is expected to add approximately 280 million gallons of annual fuel volumes, more than 400 dealer locations, approximately $30 million of annual Adjusted EBITDA, two fuel terminals, and expanded transportation capabilities.
Concerns
- Net cash provided by operating activities was $10.4 million compared to $23.2 million in the year-ago quarter.
- Comparable wholesale sites had reduced operating income.
- Wholesale consignment-agent fuel contribution decreased $1.1 million, and fuel margin per gallon declined 1.5 cents per gallon, due to margin compression as market prices declined more quickly than weighted average inventory cost.
- Fleet Fueling fuel contribution decreased by $0.7 million, with declines at both proprietary and third-party cardlock locations.
- GPMP related-party gallons sold decreased by 33.9 million, or 15.1%, reflecting the challenging macroeconomic environment and ARKO Retail Sites converted to dealer locations.
- The proposed USPP transaction requires approximately $205 million in cash plus the cost of inventory, and $30 million in APC Class A common stock will be held in escrow subject to EBITDA-based financial targets.
What to watch
- Completion and financial contribution of the proposed acquisition of U.S. Petroleum Partners, LLC.
- Conversion of approximately 70 additional ARKO Parent sites committed under letter of intent, under contract, or already converted since quarter end.
- Completion of the remaining fleet fueling openings targeted for 2026.
- Fuel-margin performance at wholesale consignment-agent and Fleet Fueling locations amid inventory-cost and indexed-price movements.
- Delivery against reaffirmed full-year financial 2026 guidance, for which numerical guidance details were not included in the provided filing text.
Balance sheet and cash flow
- As of June 30, 2026, total liquidity was approximately $724 million, consisting of approximately $15 million of cash and cash equivalents and approximately $709 million of availability under the Company's lines of credit.
- Total debt, net was approximately $184.7 million as of June 30, 2026.
- Net Debt was approximately $324.2 million as of June 30, 2026.
- Net cash provided by operating activities for the quarter was $10.4 million compared to $23.2 million.
- Maintenance capital expenditures were $2.7 million and growth capital expenditures were $7.1 million for the quarter ended June 30, 2026.
Analysis
Second-quarter results showed higher reported profitability and non-GAAP cash generation. Net income increased to $12.2 million from $10.0 million, Adjusted EBITDA increased to $39.8 million from $38.3 million, and Discretionary Cash Flow increased to $27.1 million from $24.2 million. The central offset was operating cash flow, which declined to $10.4 million from $23.2 million.
Wholesale was the principal operating contributor. Wholesale operating income increased by $1.6 million as conversions of ARKO Retail Sites to dealer locations added income, although comparable wholesale sites had lower operating income. Fuel-supply-location contribution rose to $15,511 from $13,484, while consignment-agent contribution fell to $10,810 from $11,905. The fuel-supply-location margin increased to 7.6 cents per gallon from 6.3 cents per gallon, while consignment-agent margin decreased to 29.1 cents per gallon from 30.6 cents per gallon.
Fleet Fueling was weaker. Proprietary-cardlock fuel contribution declined to $16,755 from $17,070 and third-party-cardlock contribution declined to $330 from $698. Management attributed the declines to unusually high prior-year margins and second-quarter margin compression as indexed prices declined more quickly than weighted average inventory cost. GPMP related-party contribution rose to $11,458 from $11,266, aided by a fixed-margin increase to 6.0 cents per gallon from 5.0 cents per gallon, despite lower related-party gallons sold.
Capital allocation combines a quarterly dividend with continued organic investment and a significant proposed acquisition. The Company declared a $0.50 per-share quarterly dividend, while reporting $2.7 million of maintenance capital expenditures and $7.1 million of growth capital expenditures. Liquidity was approximately $724 million at June 30, 2026, including approximately $15 million of cash and cash equivalents and approximately $709 million of availability under lines of credit. Total debt, net was approximately $184.7 million and Net Debt was approximately $324.2 million.
The proposed USPP acquisition is the major strategic development. The consideration includes approximately $205 million in cash plus inventory cost, with $30 million of APC Class A common stock subject to escrow and EBITDA-based financial targets. The Company expects the transaction to add approximately 280 million gallons of annual fuel volume, more than 400 dealer locations, and approximately $30 million of annual Adjusted EBITDA. APC reaffirmed full-year financial 2026 guidance, but the provided filing text does not contain the underlying numerical outlook ranges.
Management, verbatim
APC delivered another quarter of strong execution, highlighted by growth in Adjusted EBITDA and Discretionary Cash Flow. We saw growth in operating income across all three of our segments, which we believe underscores the resilience of our platform, enabling us to perform even during volatile market conditions. Our strong first-half results reinforce our confidence in the stability of our cash flow generation, and we believe that we remain well positioned to deliver on our full-year guidance.
Arie Kotler, Chairman, President and Chief Executive Officer of APC
We also announced that we agreed to acquire the business of U.S. Petroleum Partners, which represents an important milestone in our growth story. We intentionally positioned APC with a strong balance sheet, significant liquidity and financial flexibility at the time of our IPO so we could pursue accretive and highly strategic opportunities like this one.
Arie Kotler, Chairman, President and Chief Executive Officer of APC
Not in the filing
stated, not guessed- Numerical full-year financial 2026 guidance, including revenue, gross margin, operating expenses, tax rate, Adjusted EBITDA, Discretionary Cash Flow, capital expenditures, and any other guided metrics.
- Previous-release outlook and prior-guidance comparison.
- Total revenue for the second quarter of 2026 and year-ago comparison.
- Segment revenue amounts for the Wholesale Segment, Fleet Fueling Segment, and GPMP Segment.
- Consolidated gross profit or gross margin.
- Consolidated operating income and operating margin.
- Diluted earnings per share, basic earnings per share, and any non-GAAP earnings per share.
- Six-month consolidated income-statement and cash-flow metrics.
- Free cash flow.
- Cash-flow statement details beyond net cash provided by operating activities.
- Total debt gross amount and debt maturity detail.
- Share repurchases and shares outstanding.
- A complete reported capex description, as the supplied filing text ends mid-sentence after growth capital expenditures.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is an SEC Form 8-K (Item 2.02) covering Q2 2026 results and a separately issued press release on a new acquisition agreement.
Ticker impact
ARKO Petroleum (APC) reported Q2 results and reaffirmed 2026 guidance, while also announcing an agreement to acquire U.S. Petroleum Partners for about $205M cash plus inventory.
Near-term upside bias on deal and cash-flow accretion expectations, with follow-through dependent on deal terms, financing, and integration execution.
The filing discloses specific Q2 operating metrics (Adjusted EBITDA, Discretionary Cash Flow) and a detailed acquisition framework (volume growth, $30M annual Adjusted EBITDA, consideration structure, escrow/earnout mechanics).
Market effects
Wholesale fuel distribution and fee-based terminal/transport models may see read-through demand for similar consolidation and vertical integration.
Great Lakes region supply and distribution footprint could become more concentrated, potentially affecting local dealer economics.
Limited direct global relevance; impacts are primarily North American fuel logistics and distribution economics.
Counterpoint
Operating cash flow declined year-over-year (operating cash $10.4M vs $23.2M), so investors may question whether acquisition accretion offsets near-term working-capital pressure.
Key entities
- issuerARKO Petroleum Corp.
Nasdaq-listed wholesale fuel distributor reporting Q2 2026 results and announcing the USPP acquisition.
- targetU.S. Petroleum Partners, LLC
Vertically integrated fuel supply and distribution platform APC agreed to acquire.
- controlling stockholderARKO Corp.
Parent entity referenced in the retail-to-wholesale dealer conversion program.
