Darling Ingredients (DAR) Q3 2025 earnings summary

Executive summary

• Net sales for Q3 2025 rose to $1.6 billion, up from $1.4 billion in Q3 2024, with net income at $19.4 million ($0.12 per diluted share), and strong performance in core ingredients, while renewables faced headwinds from policy uncertainty and market dynamics.

• Combined adjusted EBITDA for Q3 2025 was $245 million, up from $237 million in Q3 2024, but year-to-date net income dropped sharply due to lower DGD earnings.

• Feed and Food segments showed improved margins and steady performance, with protein and collagen demand recovering and new product launches on track.

• Fuel segment (including DGD) posted negative EBITDA, impacted by regulatory changes, lower volumes, and significant LCM expenses.

• The company is executing on strategic initiatives, including a proposed joint venture in collagen and gelatin and a refreshed share repurchase program.

Financial highlights

• Q3 2025 net sales: $1.6 billion; Q3 2024: $1.4 billion; gross margin improved to 24.7% from 22.1% year-over-year.

• Q3 2025 net income: $19.4 million; Q3 2024: $16.9 million.

• Combined adjusted EBITDA for Q3 2025: $245 million; Q3 2024: $237 million.

• Cash and cash equivalents as of September 27, 2025: $91.5 million; total debt net of cash: $4.01 billion.

• Preliminary leverage ratio at Q3 2025: 3.65x, down from 3.93x at year-end 2024.

Outlook and guidance

• Full-year 2025 core ingredients Adjusted EBITDA is estimated at $875–$900 million, with guidance for DGD withheld due to policy uncertainty.

• Management expects Q4 performance to be comparable to Q3, with potential upside if market conditions improve and higher volumes anticipated in Fuel.

• Anticipates selling an additional $125–175 million in production tax credits by year-end 2025.

• Food segment expected to rebound as global collagen demand strengthens.

• Capital expenditures for the remainder of 2025 projected at approximately $125 million, funded by operating cash flows.