Arko (ARKO) Q4 2024 earnings summary

Executive summary

• Navigated a challenging macro environment in 2024, with persistent inflation and constrained consumer spending, while executing a transformation plan focused on long-term growth and operational efficiency.

• Reported Q4 2024 net loss of $2.3M versus net income of $1.1M prior year; full-year net income was $20.8M, down from $34.6M.

• Adjusted EBITDA for Q4 was $56.8M (down from $61.8M); full-year Adjusted EBITDA was $248.9M (down from $276.3M).

• Dealerization program converted over 150 stores in 2024 (153 reported), targeting 100 more by Q1 2025, expected to generate over $20M in annualized operating income benefit.

• Launched Fueling America's Future campaign, offering loyalty customers up to $2 off per gallon to drive in-store and fuel sales.

Financial highlights

• Q4 total revenues were $1.99B, down from $2.23B; full-year revenues were $8.73B, down from $9.41B.

• Q4 adjusted EBITDA was $56.8M, down from $61.8M year-over-year, mainly due to lower retail fuel and merchandise contribution.

• Q4 net loss was $2.3M versus net income of $1.1M prior year; full-year net income was $20.8M (down from $34.6M).

• Q4 operating income was $14.4M vs. $25.3M; full-year operating income was $94.0M vs. $118.0M.

• Q4 EPS was $(0.03); full-year EPS was $0.13.

Outlook and guidance

• 2025 adjusted EBITDA expected between $233M–$253M, assuming retail fuel margin of 39.5–41.5 cents per gallon and mid-teen percent operating profit growth in wholesale.

• Q1 2025 adjusted EBITDA guidance is $27M–$33M; average retail store count expected to be 1,339.

• Plans to convert about 100 more stores to dealer sites by end of Q1 2025 and open four new NTI stores in 2025.

• Low single-digit decline in merchandise sales per average store and low single-digit increase in gallons per average store expected for Q1 2025.

• Guidance excludes net income due to volatility in fair value adjustments and depreciation/amortization.