ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FIN ANCIAL CONDITION AND RESULTS OF OPERATIONS
This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”), Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), about our expectations, beliefs, plans and intentions regarding our product development efforts, business, financial condition, results of operations, strategies and prospects. You can identify forward-looking statements by the fact that these statements do not relate to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. These factors include those contained in “Item 1A — Risk Factors” of this Annual Report on Form 10-K. Forward-looking statements reflect our views only as of the date they are made. We do not undertake any obligation to update forward-looking statements except as required by applicable law. We intend that all forward-looking statements be subject to the safe harbor provisions of PSLRA.
Overview
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 1,118 retail convenience stores as of December 31, 2025. We are also one of the largest wholesalers of fuel by gallons in the U.S. As of December 31, 2025, we supplied fuel to 2,099 dealer locations and operated 295 proprietary and third-party cardlock locations (unstaffed fueling locations). We are well diversified geographically and as of December 31, 2025, 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 through 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 the primary operating entity for our wholesale, fleet fueling and GPMP segments. We own 75.9% of the economic interests and 94.0% 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.
Description of Segments
Our reportable segments are described below.
Retail Segment
Our retail segment includes the operation of a chain of retail stores, which includes convenience stores selling fuel products and merchandise to retail 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.
As of December 31, 2025, 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.
We operate our retail stores centrally with consistent marketing, merchandising and assortment strategies across our brands, but we occasionally offer regional items based on consumer demand in select brands. We believe this approach increases operational efficiencies while preserving flexibility. Our marketing initiatives and merchandising and assortment strategies are centered around offering our customers an assortment of products with an attractive value proposition. Our retail offering includes a wide array of grab-n-go hot and cold prepared foods and dispensed beverages, take home packaged beverages and beer, candy, salty snacks, bakery and packaged sweet snacks, general and seasonal merchandise, cigarettes, and other tobacco products such as moist tobacco, vape, nicotine pouches, and cigars. We have various foodservice offerings at approximately 965 stores, with options including hot and cold grab-n-go foods, such as bakery, Nathan’s® hot dogs and Tornado® roller grill items. We have 140 stores with delis offering a more robust foodservice menu that includes fried chicken, pizza, breakfast sandwiches, chicken tenders, potato wedges and more. We supplement our foodservice offering with approximately 90 quick service major national brand restaurants such as Dunkin’ and Subway. Additionally, we offer a number of traditional convenience store services, including lottery, prepaid products, gift cards, money orders, ATMs, skill gaming, Bitcoin® ATMs and other ancillary product and service offerings. We sell fuel at 1,095 of our retail sites, and we had 211 electric vehicle (“EV”) chargers at 72 of our locations across 16 states as of December 31, 2025. We also generate revenue from car washes at approximately 65 of our locations.
Wholesale Segment
Our wholesale segment supplies fuel to gas stations operated by third-party dealers, sub-wholesalers, and bulk and spot purchasers, on either a cost plus or consignment basis. For cost plus arrangements, the dealers, sub-wholesalers and bulk and spot purchasers, purchase fuel from us, and we earn a fixed mark-up above our cost. The sales price to the dealer is determined according to the terms of the relevant agreement, which typically reflects our total fuel costs plus the cost of transportation, taxes and our fixed margin. Furthermore, we generally retain any prompt pay discounts and rebates from our fuel suppliers. For consignment arrangements, we retain ownership of the fuel inventory at the site until the time of sale to the ultimate customer by the dealer, we are responsible for the pricing of the fuel to the end consumer and we share the gross profit generated from the sale of fuel by the dealer based on the terms of the relevant contract. In certain cases, gross profit is split based on a percentage and in others, we pay a fixed fee per gallon to the dealer and retain the remainder of the profit.
Fleet Fueling Segment
Our fleet fueling segment includes the operation of proprietary and third-party cardlock locations (unstaffed fueling locations), and commissions from the sales of fuel using proprietary fuel cards that provide customers access to a nationwide network of fueling sites.
GPMP Segment
Our GPMP segment primarily engages in inter-segment transactions of wholesale distribution of fuel to substantially all of our sites that sell fuel in the retail and wholesale segments. Our GPMP segment sells and supplies fuel at its cost of fuel (including taxes and transportation) plus a fixed margin to such supplied sites and charges an inter-segment fixed fee primarily to sites in the fleet fueling segment which are not supplied by the GPMP segment. The effect of these inter-segment transactions was eliminated in the Consolidated Financial Statements.
2025 Transformation Plan Updates and Initiatives
Remodels and New-to-Industry (“NTI”) Stores
A part of our multi-year Transformation Plan includes additional 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 are planning approximately 25 remodels, all which will 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 while awaiting their remodel.
Complementing our remodeling initiative, in 2025, we opened a Dunkin’ store and two NTI (new to industry) retail stores. Two additional NTI retail stores opened thus far in 2026, and we plan to open one more NTI retail store and three Dunkin’ stores in 2026.
We are targeting 20 NTI fleet fueling locations with target openings during 2026, 10 of which we are currently advancing, which we anticipate will have a positive impact on our results of operations given the attractive, durable cash flow profile of our fleet fueling business.
fas REWARDS Loyalty Program
At the end of 2025, we had approximately 2.4 million enrolled members in our fas REWARDS loyalty program, representing a year over year increase of approximately 6% from 2024. 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, or stackable fuel cents off up to $2.00 off per gallon, up to 20 gallons at the pump as part of our Fueling America’s Future promotion. To celebrate America’s 250th anniversary in 2026, members can now save up to $2.50 per gallon in fuel savings.
In the first quarter of 2026, we plan to relaunch our fas REWARDS loyalty program app, which will include personalized features such as easy enrollment, an employee hub, store locators with individual member fuel pricing, Fueling America’s Future deals, value meals, age verified offers for tobacco and alcohol, and gaming.
Site Conversion Strategy (Dealerization)
Starting in the middle of 2024, as part of our Transformation Plan, we are 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 year ended December 31, 2025, we converted 256 retail stores to dealer 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 2026. These conversions have resulted in approximately $11.8 million in incremental operating income before general and administrative expenses for the year ended December 31, 2025.
As we proceed with our 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.
Pricing and Procurement Strategies
We continue to increase our focus on both our pricing and procurement strategies across our retail stores to support ongoing merchandise margin rate growth, including using customer centric data-driven decisions to expand our six core destination merchandise categories, which are packaged beverages, candy, salty snacks, packaged sweet snacks, alternative snacks and beer. These categories represented approximately 54% of our same store merchandise contribution for the year ended December 31, 2025. Because our core destination merchandise categories represent a high concentration of our merchandise contribution, we focus on marketing and merchandising initiatives within these categories because we believe that they will have the greatest impact on our performance.
Trends Impacting Our Business
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 2025. In April 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”). 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. 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 3,512 sites as of December 31, 2025, of which 1,118 were operated as retail convenience stores, 2,099 were dealer locations to which we supplied fuel, and 295 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:
For the Year Ended December 31,
Retail Segment
Number of sites at beginning of period
Acquired sites
Newly opened or reopened sites
Company-controlled sites converted to consignment or
fuel supply locations, net
Sites closed, divested or converted to rentals
Number of sites at end of period
For the Year Ended December 31,
Wholesale Segment 1
Number of sites at beginning of period
Acquired sites
Newly opened or reopened sites 2
Consignment or fuel supply locations converted
from Company-controlled or fleet fueling sites, net
Closed or divested sites
Number of sites at end of period
1 Excludes bulk and spot purchasers.
2 Includes all signed fuel supply agreements irrespective of fuel distribution commencement date.
For the Year Ended December 31,
Fleet Fueling Segment
Number of sites at beginning of period
Acquired sites
Newly opened or reopened sites
Fleet fueling locations converted from fuel supply
locations, net
Closed or divested sites
Number of sites at end of period
The number of fuel gallons we sell and the related fuel margin that we earn per gallon significantly impact our results of operations. Fuel gallons sold to dealers at fuel supply locations and consignment agent locations are dependent on the volume at these locations, which is impacted by the macroeconomic environment, weather and other factors. Fuel gallons sold at proprietary and third-party cardlock locations and at retail stores are impacted by changes in the number of locations, macroeconomic environment, weather, crude oil pricing and other factors.
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 price changes; however, we are not always able to do so. Competitive conditions primarily drive the timing of any increases or decreases in retail prices. Fuel margins 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 realize 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. Because market and geopolitical conditions constrain, from time to time, 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.
Additionally, the significant increase in the rate of inflation in the U.S. in recent years and the effect of higher prevailing interest rates have 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 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 increased, and may continue to increase, our costs associated with recruiting and retaining qualified 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 that we 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 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 experiencing competition from other retail sectors including grocery stores, large warehouse retail stores, dollar stores and pharmacies.
Legislative Update
On July 4, 2025, the One Big Beautiful Bill Act (“OBBB”) was signed into law. The OBBB reinstated several key income tax provisions that were initially part of the U.S. Tax Cuts and Jobs Act of 2017, but which had been phased out in recent years or were set to expire in 2025, and made other changes to income tax provisions, many of which are not effective until 2026. The OBBB, among other things, repealed the mandatory capitalization of domestic research and development expenditures under Internal Revenue Code Section 174, extended the ability to take 100% bonus depreciation, reinstituted the EBITDA based Section 163(j) calculation, revised international tax regimes, and accelerated the phase out of clean energy credits.
We have evaluated the impact of the OBBB and reflected the effects in the Consolidated Financial Statements. Specifically, we recorded a favorable impact on the timing of cash paid for taxes of $26.9 million for the year ended December 31, 2025. The OBBB did not have a material impact on our effective tax rate for 2025. We will continue to monitor future guidance and developments related to the OBBB and will update our income tax disclosures as appropriate.
Seasonality
Our business is seasonal, and our operating income in the second and third quarters has historically been significantly greater than in the first and fourth quarters as a result of the generally favorable climate and seasonal buying patterns of our customers.
Results of Operations for the years ended December 31, 2025, 2024 and 2023
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).
Consolidated Results
The table below shows our consolidated results for the years ended December 31, 2025, 2024 and 2023, together with certain key metrics.
For the Year Ended December 31,
Revenues:
(in thousands)
Fuel revenue
Merchandise revenue
Other revenues, net
Total revenues
Operating expenses:
Fuel costs
Merchandise costs
Site operating expenses
General and administrative expenses
Depreciation and amortization
Total operating expenses
Other (income) expenses, net
Operating income
Interest and other financial expenses, net
Income before income taxes
Income tax expense
Income (loss) from equity investment
Net income
Less: Net income attributable to non-controlling interests
Net income attributable to ARKO Corp.
Series A redeemable preferred stock dividends
Net income attributable to common shareholders
Fuel gallons sold
Fuel margin, cents per gallon 1
Merchandise contribution 2
Merchandise margin 3
Adjusted EBITDA 4
Non-cash rent expense 5
1 Calculated as fuel revenue less fuel costs divided by fuel gallons sold.
2 Calculated as merchandise revenue less merchandise costs.
3 Calculated as merchandise contribution divided by merchandise revenue.
4 Refer to “ Use of Non-GAAP Measures” below for discussion of this non-GAAP performance measure and related reconciliation to net income.
5 Non-cash rent expense reflects the extent to which our GAAP rent expense recognized exceeded (or was less than) our cash rent payments. GAAP rent expense varies depending on the terms of our lease portfolio. For newer leases, our rent expense recognized typically exceeds our cash rent payments, whereas, for more mature leases, rent expense recognized is typically less than our cash rent payments.
For the year ended December 31, 2025 compared to the year ended December 31, 2024
For the year ended December 31, 2025, fuel revenue decreased by $820.0 million, or 12.0%, compared to the year ended December 31, 2024. The decrease in fuel revenue was attributable primarily to a decrease in the average price of fuel compared to 2024 and fewer gallons sold in 2025 compared to 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 we operate.
For the year ended December 31, 2025, merchandise revenue decreased by $284.9 million, or 16.1%, compared to the year ended December 31, 2024, primarily due to reduced merchandise revenue from retail stores that we closed or converted to dealer locations since the middle of 2024 as well as a decrease in same store merchandise revenues.
For the year ended December 31, 2025, other revenues, net increased by $16.4 million, or 15.5%, compared to the year ended December 31, 2024, primarily due to the net impact of additional income from retail stores that we converted to dealer locations since the middle of 2024.
For the year ended December 31, 2025, total operating expenses decreased by $1,081.9 million, or 12.5%, compared to the year ended December 31, 2024. Fuel costs decreased by $791.8 million, or 12.6%, compared to 2024, and merchandise costs decreased by $205.1 million, or 17.3%, compared to 2024, consistent with the reduction in fuel and merchandise revenues. For the year ended December 31, 2025, site operating expenses decreased by $89.9 million, or 10.3%, compared to 2024 due to lower expenses from retail stores that we closed or converted to dealer locations, slightly offset by incremental expenses as a result of the SpeedyQ Acquisition.
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, partially due to an increase of $2.8 million in share-based compensation expense.
For the year ended December 31, 2025, depreciation and amortization expenses increased by $2.0 million, or 1.5%, compared to the year ended December 31, 2024 primarily due to assets acquired in the past year.
For the year ended December 31, 2025, other (income) expense, net increased by $14.8 million compared to the year ended December 31, 2024, primarily due to a gain of approximately $20.8 million related to the expiration of a real estate purchase option acquired in 2021 in connection with our acquisition of certain ExpressStop convenience stores that was accounted for as a sale-leaseback, partially offset by higher acquisition and divestiture costs, costs associated with the APC IPO and loss on disposal of assets and impairment charges for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Operating income was $102.3 million for the year ended December 31, 2025 compared to $94.0 million for the year ended December 31, 2024. The increase was primarily due to higher same store fuel contribution, the gain on the aforementioned sale-leaseback and the benefit from retail stores that we closed or converted to dealer locations, partially offset by lower same store merchandise contribution, lower fuel contribution from comparable wholesale sites and higher general, administrative, depreciation and amortization expenses.
For the year ended December 31, 2025, interest and other financial expenses, net increased by $6.2 million compared to the year ended December 31, 2024, primarily related to a decrease of $3.3 million in income recorded in 2025 compared to 2024 for fair value adjustments related to the Public Warrants, Private Warrants and Additional Deferred Shares (each as defined in the notes to the Consolidated Financial Statements) and approximately $9.2 million recorded as financial income in the year ended December 31,
2024 related to the issuance of the First Installment Shares (as defined in Note 4 to the Consolidated Financial Statements) as payment of deferred consideration and the settlement of deferred consideration related to the TEG Acquisition, partially offset by higher interest income generated and lower average interest rates in the year ended December 31, 2025.
For the years ended December 31, 2025 and 2024, income tax expense was $6.3 million and $6.1 million, respectively, and our effective tax rate for the years ended December 31, 2025 and 2024 was 21.8% and 22.8%, respectively.
For the years ended December 31, 2025 and 2024, net income attributable to the Company was $22.7 million and $20.8 million, respectively.
For the years ended December 31, 2025 and 2024, Adjusted EBITDA was $248.7 million and $248.9 million, respectively. Refer to “Use of Non-GAAP Measures” below for discussion of this non-GAAP performance measure and related reconciliation to net income.
For the year ended December 31, 2024 compared to the year ended December 31, 2023
For a discussion of the comparative results of operations for the years ended December 31, 2024 and 2023, refer to Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 26, 2025.
Segment Results
Disclosure of Incremental Contributions From Acquisitions
In the discussion of our segment results, we disclose certain information with respect to our acquisitions on an “incremental” basis. For example, incremental fuel gallons sold with respect to recent acquisitions. Incremental amounts or gallons related to such acquisitions reflect only the change (i.e. increase) in the contribution of the acquisitions between the referenced periods as they are not yet reflected in same store figures.
Retail Segment
The table below shows the results of the retail segment for the years ended December 31, 2025, 2024 and 2023, together with certain key metrics for the segment.
For the Year Ended December 31,
Revenues:
(in thousands)
Fuel revenue
Merchandise revenue
Other revenues, net
Total revenues
Operating expenses:
Fuel costs 1
Merchandise costs
Site operating expenses
Total operating expenses
Operating income
Fuel gallons sold
Same store fuel gallons sold decrease (%) 2
Fuel contribution 3
Fuel margin, cents per gallon 4
Same store fuel contribution 2, 3
Same store merchandise sales (decrease) increase (%) 2
Same store merchandise sales excluding cigarettes (decrease) increase (%) 2
Merchandise contribution 5
Merchandise margin 6
1 Excludes the estimated fixed margin or fixed fee paid to the GPMP segment for the cost of fuel.
2 Same store is a common metric used in the convenience store industry. We consider a store a same store beginning in the first quarter in which the store had a full quarter of activity in the prior year. Refer to “ Use of Non-GAAP Measures” below for discussion of this measure.
3 Calculated as fuel revenue less fuel costs. 2023 same store fuel contribution is presented compared to 2024 store basis.
4 Calculated as fuel contribution divided by fuel gallons sold.
5 Calculated as merchandise revenue less merchandise costs.
6 Calculated as merchandise contribution divided by merchandise revenue.
For the year ended December 31, 2025 compared to the year ended December 31, 2024
Retail Revenues
For the year ended December 31, 2025, fuel revenue decreased by $674.3 million, or 19.2%, compared to the year ended December 31, 2024. The decrease in fuel revenue was attributable to a decrease in same store gallons sold of approximately 5.4%, or 51.2 million gallons, reflecting the challenging macroeconomic environment as well as severe weather conditions in January and February 2025 in certain of the markets in which we operate, and a $0.18 per gallon decrease in the average retail price of fuel in 2025 compared to 2024, primarily due to market factors. Retail stores that we closed or converted to dealer locations since the middle of 2024 also negatively impacted gallons sold by 111.3 million gallons. Partially offsetting these decreases were an incremental 2.6 million gallons sold, or $6.2 million in fuel revenue, contributed by the SpeedyQ Acquisition.
For the year ended December 31, 2025, merchandise revenue decreased by $284.9 million, or 16.1%, compared to the year ended December 31, 2024, primarily caused by a decline in customer transactions reflecting the challenging macroeconomic environment as well as severe weather conditions in January and February 2025 in certain of the markets in which we operate, and a decrease in merchandise revenue of $230.5 million from retail stores that we closed or converted to dealer locations since the middle of 2024. Same store merchandise sales decreased by $61.1 million, or 4.1%, for 2025 compared to 2024. More than half the decline in same store merchandise revenues was caused by lower revenues from cigarettes. The SpeedyQ Acquisition contributed approximately $5.6 million of incremental merchandise revenue.
For the year ended December 31, 2025, other revenues, net decreased by $6.2 million, or 9.6%, compared to the year ended December 31, 2024, primarily due to a decrease in other revenues of $6.0 million from retail stores that we closed or converted to dealer locations since the middle of 2024 and a decrease of $0.8 million in same store other revenues principally due to reduced lottery commissions, partially offset by additional income from the SpeedyQ Acquisition.
Retail Operating Income
For the year ended December 31, 2025, fuel contribution decreased by $33.5 million, or 7.8%, compared to the year ended December 31, 2024. The decrease in fuel contribution was due to a decrease of $37.1 million related to retail stores that we closed or converted to dealer locations since the middle of 2024. This decrease was offset by a same store fuel contribution increase of $1.5 million and incremental fuel contribution from the SpeedyQ Acquisition of approximately $1.2 million. Same store fuel margin per gallon for 2025 increased to 42.9 cents per gallon from 40.4 cents per gallon for 2024.
For the year ended December 31, 2025, merchandise contribution decreased by $79.8 million, or 13.8%, compared to the year ended December 31, 2024, while merchandise margin increased to 33.7% in 2025 from 32.8% in 2024. The decrease in merchandise contribution was due to a $71.7 million decrease related to retail stores that we closed or converted to dealer locations since the middle of 2024 and a decrease in same store merchandise contribution of $11.3 million, partially offset by $2.1 million in incremental merchandise contribution from the SpeedyQ Acquisition. Same store merchandise margin for 2025 increased to 33.8% from 33.2% in 2024.
For the year ended December 31, 2025, site operating expenses decreased by $105.5 million, or 13.3%, compared to the year ended December 31, 2024, primarily due to $111.7 million of reduced expenses related to retail stores that we closed or converted to dealer locations since the middle of 2024, partially offset by $3.7 million of incremental expenses related to the SpeedyQ Acquisition.
Wholesale Segment
The table below shows the results of the wholesale segment for the years ended December 31, 2025, 2024 and 2023, together with certain key metrics for the segment.
For the Year Ended December 31,
Revenues:
(in thousands)
Fuel revenue
Other revenues, net
Total revenues
Operating expenses:
Fuel costs 1
Site operating expenses
Total operating expenses
Operating income
Fuel gallons sold – fuel supply locations
Fuel gallons sold – consignment agent locations
Fuel margin, cents per gallon 2 – fuel supply locations
Fuel margin, cents per gallon 2 – consignment agent locations
1 Excludes the estimated fixed margin or fixed fee paid to the GPMP segment for the cost of fuel.
2 Calculated as fuel revenue less fuel costs divided by fuel gallons sold.
Note: Information disclosed on a “comparable wholesale sites” basis excludes wholesale sites added through acquisitions and retail stores converted to dealer locations, until the first quarter in which these sites had a full quarter of wholesale activity in the prior year. Refer to “ Use of Non-GAAP Measures ” below for discussion of this non-GAAP performance measure.
For the year ended December 31, 2025 compared to the year ended December 31, 2024
Wholesale Revenues
For the year ended December 31, 2025, fuel revenue decreased by $99.0 million, or 3.5%, compared to the year ended December 31, 2024, primarily due to a decrease in the average price of fuel in 2025 as compared to 2024, partially offset by a 39.7 million, or 4.2%, increase in gallons sold. Of total gallons sold, the retail stores that we converted to dealer locations since the middle of 2024 contributed 79.7 million gallons, which were partially offset by lower volumes at comparable wholesale sites, reflecting the challenging macroeconomic environment.
Wholesale Operating Income
For the year ended December 31, 2025, wholesale operating income increased by $9.6 million compared to the year ended December 31, 2024. Additional operating income from retail stores converted to dealer locations since the middle of 2024 more than offset reduced operating income at comparable wholesale sites. An increase of $23.1 million in other revenues, net, combined with an increase in fuel contribution of $4.2 million in 2025 compared to 2024, was partially offset by an increase in site operating expenses of $17.7 million in 2025 compared to 2024. These increases were primarily due to the retail stores we converted to dealer locations since the middle of 2024.
At fuel supply locations, fuel contribution increased by $4.6 million, and fuel margin per gallon also increased for 2025 compared to 2024, due to $6.9 million of incremental contribution from the retail stores converted to dealer locations, which was partially offset by decreased prompt pay discounts related to lower fuel costs and lower volumes at comparable fuel supply wholesale sites primarily due to the macroeconomic environment and severe weather conditions in January and February 2025 in certain of the markets in which we operate.
At consignment agent locations, fuel contribution decreased by $0.4 million due to decreased prompt pay discounts related to lower fuel costs and lower volumes at comparable wholesale sites, primarily due to the macroeconomic environment and severe weather conditions in January and February 2025 in certain of the markets in which we operate, which was partially offset by the incremental contribution of $2.0 million from the retail stores converted to dealer locations. Fuel margin per gallon increased for 2025 compared to 2024 due to a larger mix of higher performing consignment dealers as compared to the prior year.
Fleet Fueling Segment
The table below shows the results of the fleet fueling segment for the years ended December 31, 2025, 2024 and 2023, together with certain key metrics for the segment.
For the Year Ended December 31,
Revenues:
(in thousands)
Fuel revenue
Other revenues, net
Total revenues
Operating expenses:
Fuel costs 1
Site operating expenses
Total operating expenses
Operating income
Fuel gallons sold – proprietary cardlock locations
Fuel gallons sold – third-party cardlock locations
Fuel margin, cents per gallon 2 – proprietary cardlock locations
Fuel margin, cents per gallon 2 – third-party cardlock locations
1 Excludes the estimated fixed fee paid to the GPMP segment for the cost of fuel.
2 Calculated as fuel revenue less fuel costs divided by fuel gallons sold.
For the year ended December 31, 2025 compared to the year ended December 31, 2024
Fleet Fueling Revenues
For the year ended December 31, 2025, fuel revenue decreased by $40.7 million, or 7.9%, and other revenues, net decreased by $0.2 million, compared to the year ended December 31, 2024. Fuel revenue was negatively impacted by a 6.1 million decrease in gallons sold, or 4.1%, due primarily to movements in crude oil pricing and severe weather conditions in January and February 2025 that impacted certain of the markets in which we operate, and a decrease in the average price of fuel in 2025 compared to 2024.
Fleet Fueling Operating Income
For the year ended December 31, 2025, fuel contribution increased by $1.4 million compared to the year ended December 31, 2024. At proprietary cardlocks, fuel contribution increased by $0.8 million, and fuel margin per gallon also increased for 2025 compared to 2024, primarily due to favorable diesel margins. At third-party cardlock locations, fuel contribution increased by $0.6 million, and fuel margin per gallon also increased for 2025 compared to 2024, primarily due to the closure of underperforming third-party locations.
For the year ended December 31, 2025, site operating expenses increased by $1.2 million compared to the year ended December 31, 2024, primarily due to higher rent and insurance.
GPMP Segment
The table below shows the results of the GPMP segment for the years ended December 31, 2025, 2024 and 2023, together with certain key metrics for the segment.
For the Year Ended December 31,
Revenues:
(in thousands)
Fuel revenue – inter-segment 1
Fuel revenue – external customers
Other revenues, net
Other revenues, net – inter-segment 1
Total revenues
Operating expenses:
Fuel costs
General and administrative expenses
Depreciation and amortization
Total operating expenses
Other income, net
Operating income
Fuel gallons sold – inter-segment
Fuel gallons sold – external customers
Fuel margin, cents per gallon 2
1 Includes the estimated fixed margin or fixed fee paid to the GPMP segment for the cost of fuel.
2 Calculated as fuel revenue less fuel costs divided by fuel gallons sold.
For the year ended December 31, 2025 compared to the year ended December 31, 2024
GPMP Revenues
For the year ended December 31, 2025, fuel revenue decreased by $774.6 million, or 13.8%, compared to the year ended December 31, 2024. The decrease in fuel revenue was attributable to a decrease in both gallons sold and the average price of fuel for 2025 compared to 2024.
For the years ended December 31, 2025 and 2024, other revenues, net and inter-segment other revenues, net related to the fixed fee primarily charged to sites in the fleet fueling segment (5.0 cents per gallon sold for the three years ended December 31, 2025) were similar.
GPMP Operating Income
Fuel margin decreased by $6.3 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to fewer gallons sold to the retail segment at a fixed margin.
For the year ended December 31, 2025, total general and administrative expenses decreased $0.3 million from those in the year ended December 31, 2024, and depreciation and amortization expenses for 2025 remained consistent with 2024.
Use of Non-GAAP Measures
We disclose certain measures on a “same store basis,” which is a non-GAAP measure. Information disclosed on a “same store basis” excludes the results of any store that is not a “same store” for the applicable period. A store is considered a same store beginning in the first quarter in which the store had a full quarter of activity in the prior year. We believe that this information is useful for our investors, securities analysts, and other interested parties by providing greater comparability regarding our ongoing operating performance. Neither this measure nor those described below should be considered an alternative to measurements presented in accordance with generally accepted accounting principles in the United States (“GAAP”).
We disclose certain measures on a “comparable wholesale sites” basis, which is a non-GAAP measure. Information disclosed on a “comparable wholesale sites” basis excludes wholesale sites added through retail stores converted to dealer locations until the first quarter in which these sites had a full quarter of wholesale activity in the prior year. We believe that this information is useful for our investors, securities analysts, and other interested parties by providing greater comparability regarding our ongoing operating performance.
We define EBITDA as net income including net income attributable to non-controlling interests before net interest expense, income taxes, depreciation and amortization. Adjusted EBITDA further adjusts EBITDA by excluding the gain or loss on disposal of assets, impairment charges, acquisition and divestiture costs, share-based compensation expense, other non-cash items, certain litigation expenses and other unusual or non-recurring charges. Both EBITDA and Adjusted EBITDA are non-GAAP financial measures.
We use EBITDA and Adjusted EBITDA for operational and financial decision-making and believe these measures are useful in evaluating our performance because they eliminate certain items that we do not consider indicators of our operating performance. EBITDA and Adjusted EBITDA are also used by many of our investors, securities analysts, and other interested parties in evaluating our operational and financial performance across reporting periods. We believe that the presentation of EBITDA and Adjusted EBITDA provides useful information to investors by allowing an understanding of key measures that we use internally for operational decision-making, budgeting, evaluating acquisition targets, and assessing our operating performance.
EBITDA and Adjusted EBITDA should not be considered as alternatives to any financial measure presented in accordance with GAAP, including net income. These non-GAAP measures have limitations as analytical tools and should not be considered in isolation, or as substitutes for the analysis of our results as reported under GAAP. We strongly encourage investors to review our financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.
Because non-GAAP financial measures are not standardized, same store measures, comparable wholesale sites, EBITDA and Adjusted EBITDA, as defined by us, may not be comparable to similarly titled measures reported by other companies. It therefore may not be possible to compare our use of these non-GAAP financial measures with those used by other companies.
The following table contains a reconciliation of net income to EBITDA and Adjusted EBITDA for the years ended December 31, 2025, 2024 and 2023.
For the Year Ended December 31,
(in thousands)
Net income, including net income attributable to non-controlling
interests
Interest and other financing expenses, net
Income tax expense
Depreciation and amortization
EBITDA
Acquisition and divestiture costs (a)
APC IPO costs (b)
(Gain) loss on disposal of assets and impairment charges (c)
Share-based compensation expense (d)
(Income) loss from equity investment (e)
Taxes paid (received) in arrears (f)
Adjustment to contingent consideration (g)
Expenses related to wage and hour claim settlement (h)
Other (i)
Adjusted EBITDA
Additional information
Non-cash rent expense (j)
Eliminates costs incurred that are directly attributable to business acquisitions and divestitures (including conversion of retail stores to dealer locations) and salaries of employees whose primary job function is to execute our acquisition and divestiture strategy and facilitate integration of acquired operations.
Eliminates one-time costs incurred related to the APC IPO, which closed on February 13, 2026.
Eliminates the non-cash loss from the sale or disposal of property and equipment, the loss recognized upon the sale of related leased assets and impairment charges on property and equipment and right-of-use assets related to closed and non-performing sites, and a $20.8 million gain related to the expiration in the second quarter of 2025 of a real estate purchase option acquired in 2021 that was accounted for as a sale-leaseback (see Note 11 to the Consolidated Financial Statements).
Eliminates non-cash share-based compensation expense related to the equity incentive program in place to incentivize, retain, and motivate our employees and members of our Board.
Eliminates our share of (income) loss attributable to our unconsolidated equity investment.
Eliminates the payment (receipt) of historical fuel, franchise and other tax amounts for multiple prior periods.
Eliminates fair value adjustments primarily related to the contingent consideration owed to the seller for the 2020 Empire acquisition.
Eliminates non-recurring expenses accrued in net income related to a wage and hour collective action settlement described in Note 14 to the Consolidated Financial Statements.
Eliminates other unusual or non-recurring items that we do not consider to be meaningful in assessing operating performance.
Non-cash rent expense reflects the extent to which our GAAP rent expense recognized exceeded (or was less than) our cash rent payments. GAAP rent expense varies depending on the terms of our lease portfolio. For newer leases, our rent expense recognized typically exceeds our cash rent payments, whereas, for more mature leases, rent expense recognized is typically less than our cash rent payments.
Liquidity and Capital Resources
Our primary sources of liquidity are cash flows from operations, availability under our credit facilities and our cash balances. Our principal liquidity requirements are the financing of current operations, funding capital expenditures (including acquisitions), and servicing debt. We finance our inventory purchases primarily from customary trade credit aided by relatively rapid inventory turnover, as well as cash generated from operations. Rapid inventory turnover allows us to conduct operations without the need for large
amounts of cash and working capital. We largely rely on internally generated cash flows and borrowings for operations, which we believe are sufficient to meet our liquidity needs for the foreseeable future.
Our ability to meet our debt service obligations and other capital requirements, including capital expenditures, as well as the cost of acquisitions, will depend on our future operating performance which, in turn, will be subject to general economic, financial, business, competitive, legislative, regulatory and other conditions, many of which are beyond our control. As a normal part of our business, we will from time to time consider opportunities to repay, redeem, repurchase or refinance our indebtedness, depending on market conditions. Changes in our operating plans, lower than anticipated sales, increased expenses, acquisitions, or other events may cause us to seek additional debt or equity financing in future periods. Additional debt financing could impose increased cash payment obligations, as well as covenants that may restrict our operations. There can be no guarantee that financing will be available on acceptable terms or at all. As of December 31, 2025, approximately 50% of our debt bore interest at variable rates, an increase from approximately 49% as of December 31, 2024, which increases our interest rate risk and may require that we use more of our cash flow for the payment of interest if prevailing interest rates increase or we incur additional indebtedness under our variable rate facilities or otherwise. See also “Quantitative and Qualitative Disclosures about Market Risk—Interest Rate Risk.”
As of December 31, 2025, we were in a strong liquidity position of approximately $888 million, consisting of approximately $305 million of cash and cash equivalents and approximately $583 million of availability under our lines of credit available for certain purposes. This liquidity position currently provides us with adequate funding to satisfy our contractual and other obligations from our existing cash balances. As of December 31, 2025, we had no outstanding borrowings under our $140.0 million PNC Line of Credit (as defined below), $32.9 million of unused availability under the M&T equipment line of credit, described below, and $418.7 million of unused availability under our $800 million Capital One Line of Credit (as defined below), which we may elect to increase up to $1.0 billion, subject to obtaining additional financing commitments from current lenders or other banks, and subject to certain other terms. Our liquidity position increased significantly following the closing of the APC IPO on February 13, 2026 and the use of the proceeds to repay approximately $184.0 million of the indebtedness under our Capital One Line of Credit.
The Board declared, and the Company paid, dividends of $0.03 per share of common stock on each of March 21, 2025, May 30, 2025, August 29, 2025, and December 1, 2025, totaling approximately $13.6 million. Additionally, the Board declared a quarterly dividend of $0.03 per share of common stock, to be paid on March 20, 2026 to stockholders of record as of March 10, 2026. The amount and timing of dividends payable on our common stock are within the sole discretion of our Board, which will evaluate dividend payments within the context of our overall capital allocation strategy on an ongoing basis, giving consideration to our current and forecast earnings, financial condition, cash requirements and other factors. There can be no assurance that we will continue to pay such dividends or the amounts of such dividends.
In May 2024, the Board increased the size of our share repurchase program for up to an aggregate of $125.0 million of our outstanding shares of common stock, from an aggregate of $100.0 million of our outstanding shares of common stock. During the year ended December 31, 2025, we repurchased approximately 6.1 million shares of common stock under the share repurchase program for approximately $25.7 million, or an average price of $4.19 per share. There is no availability remaining under the share repurchase program.
To date, we have funded capital expenditures primarily through funds generated from operations, funds received from vendors, sale-leaseback transactions, the issuance of debt and existing cash. Future capital required to finance operations, acquisitions, remodel and update stores, and add NTI retail stores and fleet fueling locations is expected to come from cash on hand, cash generated by operations, availability under our lines of credit, and additional long-term debt and equipment leases, as circumstances may dictate. In the short- to medium-term, we currently expect that our capital spending program will be primarily focused on remodeling and updating stores, including as part of our Transformation Plan, adding NTI retail stores and fleet fueling locations, strategic acquisitions and maintaining our properties and equipment. In the medium- to long-term, we currently expect that our capital spending program will align with our Transformation Plan. We do not expect such capital needs to adversely affect liquidity.
Cash Flows for the Years Ended December 31, 2025, 2024 and 2023
Net cash provided by (used in) operating activities, investing activities and financing activities for the years ended December 31, 2025, 2024 and 2023 were as follows:
For the Year Ended December 31,
Net cash provided by (used in):
(in thousands)
Operating activities
Investing activities
Financing activities
Effect of exchange rates
Total
For a discussion of the comparison of our cash flows for the years ended December 31, 2024 and 2023, refer to Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations ” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 26, 2025, under the subheading “Cash Flows for the Years Ended December 31, 2024, 2023 and 2022.”
Operating Activities
Cash flows provided by operations are our main source of liquidity. We have historically relied primarily on cash provided by operating activities, supplemented as necessary from time to time by borrowings on our credit facilities and other debt or equity transactions to finance our operations and to fund our capital expenditures. Cash flow provided by operating activities is primarily impacted by our net income and changes in working capital.
For the year ended December 31, 2025, cash flows provided by operating activities were $192.6 million compared to $221.9 million for the year ended December 31, 2024. The decrease was primarily the result of decreases in working capital as a result of the day of the week on which 2025 ended, which were partially offset by $6.1 million of lower net interest payments, $4.6 million of lower net tax payments, deposits received from dealers (including deposits related to retail stores that we expect to convert to dealer locations), and incremental vendor incentives received.
Investing Activities
Cash flows used in investing activities primarily reflect capital expenditures for acquisitions, growth and replacing and maintaining existing facilities and equipment used in the business.
For the year ended December 31, 2025, cash used in investing activities increased by $4.9 million to $119.8 million from $114.9 million for the year ended December 31, 2024. For the year ended December 31, 2025, we used $127.3 million for capital expenditures, including the purchase of 23 fee properties for $23.6 million, investments in NTI retail stores, remodeling of new format stores, EV chargers, upgrades to fuel dispensers and other investments in our stores.
Financing Activities
Cash flows from financing activities primarily consist of increases and decreases in the principal amount of our lines of credit and other indebtedness, and the issuance of common stock, net of dividends paid and common stock repurchases.
For the year ended December 31, 2025, financing activities consisted primarily of net proceeds of $14.7 million from long-term debt, repayments of $5.7 million for financing leases, $3.2 million for additional consideration payments related to the 2020 acquisition of the business of Empire Petroleum Partners, LLC, $13.6 million for dividend payments on common stock, $5.8 million for dividend payments on the Series A redeemable preferred stock and $28.0 million for common stock repurchases. Cash flows from financing activities for the year ended December 31, 2024 were impacted by payment of the deferred consideration owed for the TEG Acquisition, including the repurchase of shares originally issued as payment of deferred consideration and the settlement of deferred consideration related to the TEG Acquisition.
Indebtedness
Credit Facilities and Senior Notes
Senior Notes
As of December 31, 2025, the Company had outstanding $450 million aggregate principal amount of its 5.125% Senior Notes due 2029 (the “Senior Notes”). Issued in October 2021, the Senior Notes are guaranteed, on an unsecured senior basis, by certain of the Company’s domestic subsidiaries (the “Guarantors”). The indenture governing the Senior Notes contains customary restrictive covenants that, among other things, generally limit the ability of the Company and substantially all of its subsidiaries to (i) create liens, (ii) pay dividends, acquire shares of capital stock and make payments on subordinated debt, (iii) place limitations on distributions from certain subsidiaries, (iv) issue or sell the capital stock of certain subsidiaries, (v) sell assets, (vi) enter into transactions with affiliates, (vii) effect mergers and (viii) incur indebtedness. The Senior Notes and the guarantees rank equally in right of payment with all of the Company’s and the Guarantors’ respective existing and future senior unsubordinated indebtedness and are effectively subordinated to all of the Company’s and the Guarantors’ existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness; and are structurally subordinated to any existing and future obligations of subsidiaries of the Company that are not Guarantors.
Financing Agreement with PNC
GPM and certain subsidiaries have a financing arrangement (as amended, the “PNC Credit Agreement”) with PNC Bank National Association (“PNC”) to provide a line of credit with an aggregate principal amount of up to $140 million for purposes of financing working capital (the “PNC Line of Credit”).
The PNC Line of Credit bears interest, as elected by GPM at: (a) SOFR Adjusted plus Term SOFR (as defined in the PNC Credit Agreement) plus a margin of 1.25% to 1.75% or (b) a rate per annum equal to the alternate base rate (as defined in the PNC Credit Agreement) plus a margin of 0% to 0.50%. Every quarter, the SOFR margin rate and the alternate base rate margin rate are updated based on the quarterly average undrawn availability of the line of credit. The calculation of the availability under the PNC Line of Credit is determined monthly subject to terms and limitations as set forth in the PNC Credit Agreement, taking into account the balances of receivables, inventory and letters of credit, among other things. As of December 31, 2025, $8.1 million of letters of credit were outstanding under the PNC Credit Agreement.
In connection with the consummation of the APC IPO, the PNC Credit Agreement was amended and restated to, among other things, remove APC’s subsidiaries as co-borrowers, reduce the principal amount available thereunder from $140 million to $56 million and extend the maturity date for both facilities from December 22, 2027 to the earliest of: (i) February 13, 2031, (ii) the date that is six months prior to the maturity date of the Senior Notes or any permitted refinancing thereof, subject to certain conditions, and (iii) the date that is six months prior to the maturity date of the Capital One Line of Credit. Concurrently, APC and certain of APC’s subsidiaries entered into a separate amended and restated credit agreement with PNC providing for a secured revolving credit facility with substantially similar terms as those under the PNC Line of Credit; provided that the aggregate principal amount available there under is up to $84 million.
Financing Agreements with M&T Bank
As of December 31, 2025, GPM had a financing arrangement with M&T Bank (the “M&T Credit Agreement”) that provides a line of credit for up to $45.0 million to purchase equipment on or before September 2026, which may be borrowed in tranches, as well as an aggregate original principal amount, as amended in May 2025, of $83.7 million of real estate loans (the “M&T Term Loans”). As of December 31, 2025, approximately $32.9 million remained available under the equipment line of credit.
Each additional equipment loan tranche will have a term of up to five years after the date of the applicable tranche’s issuance, payable in equal monthly payments of principal plus interest, and the May 2025 amendment of the M&T Credit Agreement also provided that additional and existing borrowings under the equipment line of credit accrue interest, at GPM’s discretion, at either a fixed rate based on M&T Bank’s five-year cost of funds as of the applicable date of each tranche plus 2.25%, or a floating rate at SOFR plus 2.25%. In addition, following such amendment, the M&T Term Loans bear interest at SOFR plus 2.25%, mature in June 2026, November 2028 or May 2030 (depending on the loan) and are payable in monthly installments based on a fifteen-year amortization schedule, with the balance of each loan payable at maturity.
In connection with the consummation of the APC IPO, the M&T Credit Agreement was amended to remove APC’s subsidiaries as borrowers or guarantors thereunder, and APC’s assets that previously served as collateral under the M&T Credit Agreement were released from M&T’s security interest.
Financing Agreement with a Syndicate of Banks Led by Capital One, National Association (“Capital One”)
GPMP has a revolving credit facility with a syndicate of banks led by Capital One, National Association, in an aggregate principal amount of up to $800 million (the “Capital One Line of Credit”). At GPMP’s request, the Capital One Line of Credit can be increased up to $1.0 billion, subject to obtaining additional financing commitments from current lenders or from other banks, and subject to certain terms as detailed in the Capital One Line of Credit. The Capital One Line of Credit is available for general GPMP purposes, including working capital, capital expenditures and permitted acquisitions.
The Capital One Line of Credit matures on May 5, 2028. As of December 31, 2025, approximately $380.8 million was drawn on the Capital One Line of Credit, $0.5 million of letters of credit were outstanding under the Capital One Line of Credit and approximately $418.7 million was available thereunder.
On January 13, 2026, GPMP entered into an amendment to the Capital One Line of Credit, and on February 13, 2026, we used the proceeds from the APC IPO to repay approximately $184.0 million of the indebtedness under the Capital One Line of Credit. Additionally, GPMP entered into certain pledge and security agreements whereby the Capital One Line of Credit is secured by GPM Empire LLC’s interest in, and proceeds from, APC’s agreements with the Company and APC’s fuel supply agreements with certain of its fuel supply partners and a pledge of APC’s equity interests in GPMP.
The Capital One Line of Credit bears interest, as elected by GPMP at: (a) Adjusted Term SOFR (as defined in the agreement) plus a margin of 2.25% to 3.25% or (b) a rate per annum equal to the alternate base rate (as defined in the agreement) plus a margin of 1.25% to 2.25%. The margin is determined according to a formula in the Capital One Line of Credit that depends on GPMP’s leverage.
Additionally, the Capital One Line of Credit limits GPMP’s ability to pay dividends to APC to the extent of its available cash, which is generally the amount of cash and cash equivalents of GPMP and its subsidiaries less certain cash reserves, as determined by GPM Petroleum GP, LLC, GPMP’s general partner.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with GAAP and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Note 2, “Summary of Significant Accounting Policies,” of the Consolidated Financial Statements describes the significant accounting policies and methods used in the preparation of the Company’s Consolidated Financial Statements. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. We believe the following critical accounting estimates affect our more significant judgments and estimates used in the preparation of our Consolidated Financial Statements.
Application of ASC 842, Leases (“ASC 842”)
The lease liabilities and right-of-use assets are significantly impacted by the following:
Our determination of whether it is reasonably certain that an extension option will be exercised.
Our determination of whether it is reasonably certain a purchase option will be exercised.
Some of the lease agreements include an increase in the consumer price index coupled with a multiplier and a percentage increase cap effectively assures the cap will be reached each year. We determine, based on past experience and consumer price index increase expectations, if these types of variable payments are in-substance fixed payments, in which case such payments are included in the lease payments and measurement of the lease liabilities.
The discount rates used in the calculations of the right-of-use assets and lease liabilities are based on our incremental borrowing rates and are primarily affected by economic environment, differences in the duration of each lease and the nature of the leased asset.
Environmental provision and reimbursement assets
We estimate the anticipated environmental costs with respect to contamination arising from the operation of gasoline marketing operations and the use of aboveground and underground storage tanks as well as the costs of other exposures and recognize a liability when these losses are anticipated and can be reasonably estimated. Reimbursement for these expenses from various state underground storage tank trust funds or from insurance companies is recognized as an asset and included in other current assets or non-current assets, as appropriate. The scope of the reimbursement asset and liability is estimated by a third-party at least twice a year and adjustments are made according to past experience, changing conditions and changes in governmental policies.
Liability for dismantling and removing aboveground and underground storage tanks and restoring the site on which the storage tanks are located
The liability is based on our estimates with respect to the external costs which will be necessary to remove the aboveground and underground storage tanks in the future, regulatory requirements, discount rate and an estimate of the length of the useful life of the storage tanks.
Property and equipment and amortizable intangible assets
We evaluate property and equipment and amortizable intangible assets for impairment when facts and circumstances indicate that the carrying values of such assets may not be recoverable. When evaluating for impairment, we first compare the carrying value of the asset to the asset’s estimated future undiscounted cash flows. If the estimated undiscounted future cash flows are less than the carrying value of the asset, we determine if we have an impairment loss by comparing the carrying value of the asset to the asset's estimated fair value and recognize an impairment charge when the asset’s carrying value exceeds its estimated fair value. The adjusted carrying amount of the asset becomes its new cost basis and is depreciated over the asset’s remaining useful life.
Impairment of goodwill
We evaluate the need for impairment with regard to goodwill once a year or with greater frequency if there are indicators of impairment exist. Goodwill is tested for impairment by first comparing the fair value of a reporting unit with its carrying amount, including goodwill. The fair value of a reporting unit is determined according to assumptions and computations we set.
We perform an annual assessment to evaluate whether an impairment of goodwill exists. We performed the evaluation with the assistance of independent assessor which, for purposes of determining the fair value of the retail and GPMP reporting units to
which the goodwill was attributed, utilized the income approach, namely, the present value of the future cash flows forecasted to be derived from the reporting units, as well as the market approach.
For the 2025 annual impairment test, the data used for the income approach was directly linked to our internal projections for 2026 through 2030. The long-term growth rate used in the terminal year was (0.7)% for the GPMP reporting unit, and was 2.9% for the retail reporting unit, in accordance with the relevant weighted average long-term nominal growth rate. The cash flows used assumed an unlevered, debt-free basis with no deduction for interest of debt principal to present the cash flows available for debt and equity holders. The discount rate for each reporting unit was determined based on the risk profile of each of the reporting units, and was derived from its weighted average cost of capital (“WACC”) as assessed by management with the assistance of an independent assessor. The WACC took into account both debt and equity. The discount rate applied to the cash flow projections for the GPMP and the retail reporting units was approximately 10% and 11%, respectively.
The impairment review was sensitive to changes in the key assumptions used. Our key assumptions included revenue and profit growth, capital expenditures, external industry data and past experiences. The major assumptions that could result in significant sensitivities were the discount rate, the long-term growth rate and capital expenditures. Sensitivity analyses were performed by applying various reasonable scenarios whereby the long-term growth rate and discount rate were adjusted within a reasonable range. None of the sensitivity scenarios indicated a potential impairment in any of the reporting units.
Deferred tax assets
We account for income taxes and the related accounts in accordance with FASB ASC Topic 740, Income Taxes (“ASC 740”). Deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted rates expected to be in effect during the year in which the differences reverse. Deferred tax assets are recognized for future tax benefits and credit carryforwards to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. We periodically assess the likelihood that we will be able to recover our deferred tax assets and reflect any changes in estimates in the valuation allowance. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.
We are required to make judgments, estimates and assumptions to establish the amount of deferred tax assets to be recognized based on timing differences, the expected taxable income and its sources and the tax planning strategy.
ITEM 7A. Quantitative and Qualitat ive Disclosures about Market Risk
Commodity Price Risk
We have limited exposure to commodity price risk as a result of the payment and volume-related discounts in certain of our fuel supply contracts with our fuel suppliers, which are based on the market price of motor fuel. Significant increases in fuel prices could result in significant increases in the retail price of fuel and in lower sales to consumers and dealers. When fuel prices rise, some of our dealers may have insufficient credit to purchase fuel from us at their historical volumes. In addition, significant and persistent increases in the retail price of fuel could also diminish consumer demand, which could subsequently diminish the volume of fuel we distribute. A significant percentage of our sales are made with the use of credit cards. 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 and higher gallon movements result in higher credit card expenses. These additional fees increase operating expenses. From time to time, we make use of derivative commodity instruments to manage risks associated with an immaterial number of gallons designed to offset changes in the price of fuel that are directly tied to firm commitments to purchase diesel fuel.
Interest Rate Risk
We may be subject to market risk from exposure to changes in interest rates based on our financing, investing, and cash management activities. The Senior Notes bear a fixed interest rate; therefore, an increase or decrease in prevailing interest rates has no impact on our debt service for the Senior Notes. As of December 31, 2025, the interest rate on our Capital One Line of Credit was 7.0%, and the interest rate on our M&T Term Loans and M&T equipment loans was 6.2%. As of December 31, 2024, the interest rate on our Capital One Line of Credit was 7.4%, the interest rate on our M&T Term Loans was 7.6% and the interest rate on the variable portion of our M&T equipment loan was 7.4% (approximately $15.9 million of the total loan) As of December 31, 2025, approximately 50% of our debt bore interest at variable rates. Based on the outstanding balances as of December 31, 2025, if our applicable interest rates each increase by 1%, then our debt service on an annual basis would increase by approximately $4.7 million. Interest rates on commercial bank borrowings and debt offerings could be higher than current levels, causing our financing costs to increase accordingly. Although this could limit our ability to raise funds in the debt capital markets, we expect to remain competitive with respect to acquisitions and capital projects, as our competitors would likely face similar circumstances. For additional information regarding our interest rate risk, see “Risk Factors—Risks Related to Our Business and Industry—Our variable rate debt could adversely affect our financial condition and results of operations.”
ITEM 8. FINANCIAL STATEMEN TS AND SUPPLEMENTARY DATA
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Report of Independent Registered Certified Public Accounting Firm (PCAOB ID Number 248 )
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Changes in Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
