Darling Ingredients (DAR) Q4 2025 earnings summary

Executive summary

• Q4 and FY2025 delivered strong sales and EBITDA growth, with Q4 net sales up 20.6% to $1.7B and gross margin improving to 25.1%, despite significant restructuring and asset impairment charges of $58M that reduced net income.

• Operational excellence, portfolio optimization, and debt reduction remained key priorities, positioning for future growth.

• Strategic acquisition in Brazil and advancement of a food segment JV are expected to drive synergies and higher-value product growth.

• Monetization of $255M in Production Tax Credit sales enhanced cash generation and supported deleveraging.

Financial highlights

• Q4 adjusted EBITDA was $336.1M, up 16.1% YoY; FY2025 combined adjusted EBITDA was $1.03B, down from $1.08B in 2024.

• Q4 net income was $56.9M ($0.35/diluted share), down from $101.9M ($0.63/share) YoY, mainly due to restructuring charges.

• Q4 net sales were $1.7B, up from $1.4B YoY; FY2025 net sales reached $6.1B, up from $5.7B.

• Gross margin improved to 25.1% in Q4 from 23.5% YoY; FY gross margin was 24.0%.

• Year-end net debt was $3.8B, with leverage ratio improving to 2.9x from 3.9x YoY.

Outlook and guidance

• Q1 2026 core ingredients adjusted EBITDA is expected at $240M–$250M, reflecting seasonal softness and weather impacts.

• DGD Q1 2026 production estimated at 260M gallons with improved margins; volumes expected to ramp up post-RVO clarity.

• Positive demand trends and policy tailwinds anticipated to support growth through 2026.

• Market for PTC sales is maturing, with continued monetization expected.