Darling Ingredients (DAR) Q1 2025 earnings summary

Executive summary

• Q1 2025 reported a net loss of $26.2 million (–$0.16 per diluted share), compared to net income of $81.2 million ($0.50 per share) in Q1 2024, primarily due to a sharp decline in Fuel/DGD segment earnings.

• Total net sales were $1.38 billion, down from $1.42 billion year-over-year, reflecting lower finished product pricing and declines in both related party and third-party sales.

• Combined Adjusted EBITDA for Q1 2025 was $195.8 million, down from $280.1 million in Q1 2024; core business EBITDA (excluding DGD) rose to ~$190 million from ~$165 million year-over-year.

• Positive cash flow was maintained, with $129.5 million in dividends received from DGD.

• Paid down $146.2 million in debt and repurchased $35 million in stock during Q1 2025.

Financial highlights

• Gross margin improved to 22.6% from 21.4% year-over-year.

• Cash and cash equivalents stood at $81.5 million; $1.27 billion available under revolving credit facility.

• Leverage ratio improved to 3.33x at Q1 2025 end (from 3.93x at Q4 2024 end); net debt decreased to $3.84 billion.

• Capital expenditures were $63 million in Q1 2025.

• DGD Adjusted EBITDA (Darling's share) dropped sharply to $6.0 million from $115.1 million year-over-year.

Outlook and guidance

• Reaffirmed full-year 2025 combined adjusted EBITDA guidance of $1.25–$1.3 billion.

• Core business expected to generate $950 million–$1 billion in EBITDA for the year.

• Feed and Food segments anticipate improved performance, with strong collagen demand and higher fat pricing.

• Fuel segment outlook is brighter for Q2 and beyond as DGD is positioned as a cost leader and margins are expected to improve.

• Management expects $337 million in additional capital expenditures for the remainder of 2025, funded by operating cash flows.