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What were the key takeaways from ARKO’s earnings call?

- **Dealerization Payoff**: 350 stores converted, $20M+ annual EBITDA benefit, and $10M+ G&A savings. Dealerized sites reduce CapEx by $15-20M annually.
- **Loyalty-Driven Growth**: fas REWARDS members spend 53% more, with 2.4M enrollees. NTI stores achieve 23% foodservice sales mix.
- **Profitable Fuel Strategy**: Wholesale fuel +7.5% gallons YoY, fleet margins up 5.7%. Q4 EBITDA guidance $50-60M.
- **Capital Efficiency**: $890M liquidity, 935K shares repurchased. 2026 capex focused on remodels, cardlocks, and dealerization.

**【CEO Summary Section】**
- **Dealerization Progress**: Converted 350 stores as of Q3 2025, with 185 additional sites under LOI. Fully scaled, dealerization is expected to deliver $20M+ annualized operating income benefit and $10M+ G&A savings. Dealerized stores show reduced overhead and improved efficiency.
- **Loyalty Program Success**: fas REWARDS enrollment grew 37% QoQ, with 2.4M members spending 53% more than non-members. Foodservice sales in NTI stores reached 23% of merchandise, exceeding targets.
- **Merchandise Performance**: Same-store sales (ex-cigs) flat YoY, best in 18 months. OTP basket grew 16%, with same-store sales up 6.6% and margin +300bps. Foodservice remodels drive 55% pump-to-store conversion.
- **Fuel Strategy**: Prioritize profitability over volume; same-store fuel margin $0.438/gallon. Wholesale fuel contribution up mid-single digits, driven by dealerized sites.
- **Capital Allocation**: Repurchased 935K shares in Q3, maintaining focus on dealerization, remodels, and fleet expansion.

**【CFO Financial Commentary】**
- **Q3 2025 Results**: Adjusted EBITDA $75.2M (vs. $78.8M YoY), above guidance midpoint. Retail segment operating income $77.5M (vs. $85.1M YoY), offset by $24.1M wholesale segment growth.
- **Cost Efficiency**: G&A $40M (vs. $38.6M YoY), driven by $1.7M share-based comp increase. Dealerization reducing maintenance CapEx by $15-20M annually.
- **Balance Sheet**: $890M liquidity, $307M cash. Full-year EBITDA guidance updated to $233-243M.
- **Segment Outlook**: Q4 2025 EBITDA $50-60M, with wholesale +mid-teens, fleet -mid-single digits.

**【Q&A Highlights】**
- **Remodel Acceleration**: 7 remodels completed, 20+ in pipeline. Foodservice remodels target 20%+ food sales mix.
- **Dealerization Impact**: Retained stores show higher productivity, offsetting dealerized site closures. Midwest underperformance reflects broader regional trends.
- **Fleet Expansion**: 5 new cardlocks planned for 2026, with $1-2M/unit capex vs. $6-8M for NTI stores. Fleet fueling margins up 5.7% YoY.
- **Margin Sustainability**: Promotions with vendors (e.g., Fueling America) drive margin expansion, supported by 37% loyalty enrollment growth.
- **Capital Allocation**: Prioritize dealerization ($20M+ EBITDA benefit), remodels, and fleet/cardlock expansion over share buybacks.

Arko Corp. (ARKO) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

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