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ARKO Nasdaq· Arko Corporation
Earnings report Q4 2023

ARKO Corp. Reports Strong Revenue Growth in Latest Quarter

Segments of Revenue

ARKO Corp. reported total revenues of $9.41 billion in the latest quarter, representing a significant increase from $9.14 billion in the previous year. The company's revenue is derived from three main segments: fuel revenue, merchandise revenue, and other revenues.

  • Fuel revenue increased to $7.46 billion, up from $7.40 billion in the previous year. This growth can be attributed to higher fuel prices and an increase in fuel gallons sold, which reached 2.24 billion in the latest quarter.
  • Merchandise revenue also showed positive growth, reaching $1.84 billion compared to $1.65 billion in the previous year. This increase can be attributed to higher merchandise contribution and margin, with merchandise contribution reaching $585.12 million and merchandise margin improving to 31.8%.
  • Other revenues, including net income from loans to subsidiaries and other investees, reached $110.36 million, up from $94.07 million in the previous year.

Strengths

ARKO Corp. demonstrated strong financial performance in the latest quarter, driven by robust revenue growth. The increase in fuel revenue can be attributed to higher fuel prices and an increase in fuel gallons sold. The company's merchandise segment also performed well, with higher merchandise contribution and margin. Management comments indicate that the company's focus on improving operational efficiency and customer experience has contributed to these positive results.

Challenges

While ARKO Corp. reported strong revenue growth, it also faced challenges in managing operating expenses. Total operating expenses increased to $9.28 billion in the latest quarter, up from $8.96 billion in the previous year. This increase was primarily driven by higher fuel costs, merchandise costs, and store operating expenses. The company needs to carefully manage these expenses to ensure sustainable profitability.

Noteworthy

It is worth mentioning that ARKO Corp. reported adjusted EBITDA of $290.43 million in the latest quarter, compared to $301.05 million in the previous year. This slight decrease in adjusted EBITDA indicates that while the company achieved strong revenue growth, it faced some challenges in controlling expenses and maintaining profitability.

Summary

ARKO Corp. delivered a strong performance in the latest quarter, with significant revenue growth driven by higher fuel and merchandise revenues. The company's focus on operational efficiency and customer experience has contributed to these positive results. However, the company needs to address the challenge of increasing operating expenses to ensure sustainable profitability. Overall, ARKO Corp. has demonstrated its ability to generate strong revenue growth, positioning it well for future success.

Source documents

Form 10-K  filed on Feb 27, 2024
13 pages scanned

Reference data

Company financials Q4 revenue 2.23B
Analyst estimates Q4 EPS missed by -90.00%
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