Darling Ingredients (DAR) Q4 2024 earnings summary

Executive summary

• Q4 2024 was the strongest quarter of the year, making FY 2024 one of the best in company history despite volatile global markets.

• Focused on margin management, operational excellence, and disciplined capital deployment.

• Leadership transition: Brad Phillips retiring as CFO, Bob Day assuming the role.

• DGD's sustainable aviation fuel unit started up under budget and ahead of schedule, enabling ~250 million gallons annual production and meeting specifications.

• New collagen peptide product launched, reducing post-meal glucose spikes by 42%, with growing demand and more products in pipeline.

Financial highlights

• Q4 2024 net income: $101.9M ($0.63/share) vs. $84.5M ($0.52/share) in Q4 2023; FY 2024 net income: $278.9M ($1.73/share) vs. $647.7M ($3.99/share) in FY 2023.

• Q4 2024 net sales: $1,417.7M (down 12.2% YoY); FY 2024: $5,715.2M (down 15.8% YoY).

• Q4 2024 operating income: $122.4M, down from $158.8M in Q4 2023; FY 2024 operating income: $468.2M vs. $949.7M in FY 2023.

• Q4 2024 Adjusted EBITDA: $289.5M (net of $59M LCM adjustment); FY 2024 combined adjusted EBITDA: $1,079.8M (down 33.0% YoY).

• DGD reported $170M operating income in Q4 and $507M for FY 2024; DGD EBITDA per gallon in Q4 was $0.40, or $0.81 excluding $118M LCM adjustment.

Outlook and guidance

• 2025 guidance: $1.25B–$1.3B combined Adjusted EBITDA.

• Expecting stronger 2025 performance, with momentum building through the year and upward trend in fat prices.

• Focus on deleveraging, aiming for 2.5x bank leverage ratio.

• Anticipate higher distributions from Diamond Green Diesel and increased SAF sales.

• Clarity on the 45Z Clean Fuels Production Credit expected to support monetization of credits.