Darling Ingredients Inc. Reports Fourth Quarter and Fiscal Year 2025 Financial Results
Darling Ingredients Inc. (NYSE: DAR), a global leader in sustainable natural ingredients, today announced its financial results for the fourth quarter and fiscal year ended January 3, 2026. The company highlighted solid sales growth, strategic portfolio adjustments, and continued operational improvements, while managing challenges in fat pricing and renewable diesel performance.
Fourth Quarter 2025 Highlights
For the fourth quarter of 2025, Darling Ingredients reported net income of $56.9 million, or $0.35 per GAAP diluted share, compared to $101.9 million, or $0.63 per share, for the same period in 2024. Despite the decline in net income, the company achieved total net sales of $1.7 billion, up from $1.42 billion in the fourth quarter of 2024, reflecting higher volumes across key segments.
Combined Adjusted EBITDA for the quarter reached $336.1 million, representing a significant increase from $289.5 million in Q4 2024. This growth demonstrates Darling Ingredients’ focus on operational efficiency and margin improvement, even in the face of challenging market conditions for certain product lines.
The company undertook a strategic realignment of its portfolio, resulting in restructuring and asset impairment charges of $58.0 million, primarily associated with its Enviroflight and CTH natural casing businesses. These steps reflect management’s ongoing commitment to sharpen the company’s focus on core strengths while improving long-term profitability.
Chairman and CEO Randall C. Stuewe stated,
Our commitment to operational excellence drove a strong fourth quarter, delivering solid EBITDA growth and sequential gross margin improvement, despite lower fat prices. While Diamond Green Diesel (DGD) had a challenging year, our best-in-class operations led the industry and produced industry-leading results. We have taken steps to sharpen our portfolio and focus on our core strengths, positioning the company to build on this momentum in 2026.
Fiscal Year 2025 Financial Performance
For the fiscal year ended January 3, 2026, Darling Ingredients reported total net sales of $6.1 billion, up from $5.7 billion in 2024. Net income for the year was $62.8 million, or $0.39 per GAAP diluted share, compared with $278.9 million, or $1.73 per share, in fiscal year 2024.
Combined Adjusted EBITDA for fiscal year 2025 totaled $1.03 billion, slightly below the $1.08 billion recorded in 2024. The decrease was partially due to lower renewable diesel margins and continued market pressure on fat prices, but the company maintained strong operational performance in its core ingredients business.
Darling Ingredients also monetized $255 million of its $285 million Production Tax Credit (PTC) sales, strengthening cash flow and supporting deleveraging initiatives. As a result, the company’s bank leverage ratio declined to 2.90X, demonstrating a continued commitment to reducing debt while maintaining strategic flexibility.
Operational Highlights
Diamond Green Diesel (DGD), a joint venture producing renewable diesel, delivered mixed results during 2025. For the fourth quarter, DGD sold 285.3 million gallons of renewable diesel at an average EBITDA of $0.41 per gallon. For the full year, sales totaled 1.003 billion gallons, averaging $0.21 per gallon EBITDA. While DGD faced market challenges, the company maintained operational leadership and industry-leading production efficiency.
Capital expenditures totaled $156.4 million in Q4 2025 and $380.5 million for the year, reflecting continued investment in growth and operational improvements across its portfolio. As of January 3, 2026, the company had $88.7 million in cash and cash equivalents and $1.32 billion available under its committed revolving credit agreement. Total debt stood at $3.94 billion.
Segment Performance and Portfolio Strategy
Darling Ingredients’ strategy to focus on core strengths is evident in its selective divestitures and business realignments. The restructuring charges related to Enviroflight and CTH natural casing businesses were designed to optimize the portfolio and reallocate resources to higher-performing areas.
The company’s core ingredients business, which excludes DGD, continues to be the primary driver of sustainable growth. For Q1 2026, management projects adjusted EBITDA of approximately $240–$250 million for this segment, reflecting steady performance and anticipated market support from favorable regulatory developments.
The additional week in the fiscal year, combined with a favorable lag in fat pricing, contributed to higher volumes and sales in the fourth quarter. While fat pricing is expected to modestly impact Q1 performance, the upcoming EPA Renewable Volume Obligation (RVO) is anticipated to support fat prices and provide a constructive backdrop for sustainable growth.
CEO Commentary
Randall C. Stuewe emphasized the company’s commitment to operational excellence and portfolio optimization:
We continue to focus on building a resilient business that can generate consistent EBITDA growth and free cash flow. Our portfolio realignment and operational improvements have strengthened our core ingredients business and positioned us for growth in 2026, even amid challenging renewable diesel markets and commodity pricing pressures.
Looking Ahead
Darling Ingredients expects to leverage its operational expertise, strategic portfolio positioning, and financial discipline to drive performance in 2026. The company’s focus on sustainable natural ingredients, renewable diesel production, and efficient capital deployment underpins its long-term strategy to create value for shareholders.
Management will provide financial guidance exclusively for its core ingredients business, reinforcing its commitment to transparency and focus on segments with the greatest growth potential.
Summary
- Q4 2025 Net Income: $56.9 million ($0.35 per share)
- Q4 2025 Net Sales: $1.7 billion
- Q4 2025 Adjusted EBITDA: $336.1 million
- FY 2025 Net Income: $62.8 million ($0.39 per share)
- FY 2025 Net Sales: $6.1 billion
- FY 2025 Adjusted EBITDA: $1.03 billion
- Production Tax Credit Monetized: $255 million
- Bank Leverage Ratio: 2.90X
Darling Ingredients continues to demonstrate operational excellence, disciplined financial management, and strategic portfolio focus. Despite market challenges in renewable diesel and commodity pricing, the company remains well-positioned for growth and continued value creation in 2026.
SOURCE LINK: https://www.darlingii.com/
