ARKO 2025 Q3 Earnings Net Income Surges 39.1% Despite Revenue Decline

ARKO Corp. (ARKO) reported mixed Q3 2025 results, beating revenue estimates while missing EPS projections. The company raised full-year adjusted EBITDA guidance to $233–243 million, reflecting confidence in its dealerization strategy and cost-cutting initiatives.

Revenue

ARKO’s total revenue fell 11.7% year-over-year to $1.99 billion, driven by lower fuel prices and reduced gallon sales. However, the retail segment offset some declines through dealerization conversions and operational efficiencies. Wholesale revenue declined due to market volatility, while fleet fueling faced softer demand.

Earnings/Net Income

Earnings per share (EPS) surged 57.1% to $0.11, and net income grew 39.1% to $13.46 million. The EPS beat was driven by cost reductions, but the company missed the $0.12 consensus estimate. The improved profitability highlights successful margin management despite revenue headwinds.

Post-Earnings Price Action Review

ARKO’s stock rose 2.49% on the earnings release date, reflecting optimism around updated guidance and strategic progress. However, the lack of historical revenue beat/miss data limits backtesting of long-term performance trends. The stock has declined 24% over the past three years, aligning with broader retail sector challenges. Institutional ownership increased slightly, signaling cautious confidence.

CEO Commentary

Arie Kotler emphasized dealerization as a “meaningful driver,” with 350 stores converted by Q3 2025. The fas REWARDS loyalty program saw 37% higher enrollment, and regional performance varied, with healthier results in the Northeast and Southeast. Kotler expressed optimism about 2026, citing margin expansion and free cash flow growth.

Guidance

Interim CFO Jordan Mann raised 2025 full-year adjusted EBITDA guidance to $233–243 million, up from previous estimates. Q4 guidance of $50–60 million reflects confidence in operational execution. Retail segment assumptions include mid-single-digit merchandise sales growth and fuel margin stability at $0.425–$0.445 per gallon.

Additional News

ARKO announced Jordan Mann as interim CFO, signaling leadership continuity amid strategic transformation. The company advanced dealerization initiatives, converting 194 retail stores to dealer sites in Q3 2025, with 347 total conversions since mid-2024. Updated EBITDA guidance underscores progress in cost-cutting, including $10M+ annual G&A savings.

The company also expanded its fas REWARDS loyalty program, achieving 55% pump-to-store conversion rates. Regional performance disparities persist, with Midwest markets under pressure. Management remains focused on store remodels and NTI locations to drive long-term value.

ARKO’s liquidity stands at $890 million, with $911.6 million in long-term debt. Capital expenditures for Q3 totaled $24.9 million, reflecting investments in operational infrastructure. Analysts highlight the stock’s potential for 62.6% upside, with a Zacks Rank #3 (Hold) and an average price target of $7.33.