ARKO Corp. (NASDAQ:ARKO) Q2 2025 Earnings: EPS Beats Estimates, Revenue Misses Amid Store Conversions

ARKO Corp. (NASDAQ:ARKO) Reports Q2 2025 Earnings: Beats EPS Estimates, Revenue Falls Short

ARKO Corp., one of the largest convenience store operators in the U.S., reported its second-quarter 2025 results, delivering a mixed performance relative to analyst expectations. The company posted earnings per share (EPS) of $0.16, significantly surpassing the consensus estimate of $0.0969. However, revenue came in at $1.999 billion, missing the projected $2.093 billion.

Key Financial Takeaways

• EPS Beat: The $0.16 EPS reflects a strong bottom-line performance, driven by improved merchandise margins (33.6% vs. 32.8% YoY) and higher retail fuel margins (44.9 cents per gallon vs. 41.6 cents YoY).
• Revenue Miss: Despite the earnings beat, revenue declined year-over-year, partly due to store conversions from company-operated retail sites to dealer locations, impacting same-store sales.
• Adjusted EBITDA: The company reported Adjusted EBITDA of $76.9 million, down from $80.1 million in Q2 2024 but exceeding the midpoint of its guidance.

Market Reaction

Following the earnings release, ARKO’s stock showed muted after-hours movement, with no immediate price change. However, the stock has declined 10.2% over the past two weeks and 11% over the past month, suggesting broader market concerns beyond the earnings report. The lack of a strong positive reaction despite the EPS beat may reflect investor caution around revenue softness and macroeconomic pressures affecting consumer spending.

Operational Highlights

• Store Optimization: ARKO continued its retail-to-dealer conversion strategy, transitioning 70 stores in Q2, bringing the total to 282 since mid-2024. The company expects this initiative to yield over $20 million in annual operating income benefits once fully scaled.
• New Store Formats: The company opened its first modernized-format store in June 2025, with early results exceeding expectations. A second location followed in early August.
• Capital Allocation: ARKO repurchased 2.2 million shares for $9.2 million and declared a quarterly dividend of $0.03 per share, signaling confidence in its cash flow stability.

Outlook vs. Analyst Estimates

ARKO maintained its full-year 2025 Adjusted EBITDA guidance of $233–$253 million, aligning with market expectations. For Q3, the company anticipates Adjusted EBITDA between $70–$80 million, with retail fuel margins expected in the 42.5–44.5 cents per gallon range. Analysts had projected $2.108 billion in Q3 revenue and $7.978 billion for the full year, but ARKO did not provide explicit revenue guidance, leaving some uncertainty.

Conclusion

While ARKO’s earnings beat underscores operational efficiency, the revenue miss and ongoing macroeconomic pressures—such as inflation and reduced discretionary spending—remain headwinds. Investors will likely monitor the company’s store conversion benefits and new format rollouts for sustained margin improvements.

For more detailed earnings estimates and historical performance, visit ARKO’s earnings page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.