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- **Core Business Strength**: Feed segment EBITDA up 31% YoY to $174 million, driven by global fat and protein demand.
- **DGD Challenges**: Q3 DGD EBITDA negative $3 million due to $38 million LIFO/LCM losses, but Q4 margins improving with higher RINs.
- **Policy Impact**: EPA expected to finalize 2026-2027 RVO by end-2025, with 50% SRE reallocation potentially boosting U.S. biofuel demand.
- **Debt Reduction**: Targeting $3.5 billion debt by year-end, with $200 million+ PTC sales in Q4 and 2.5x leverage target.
- **2026 Outlook**: Optimism around SAF sales, core ingredients momentum, and potential RIN price recovery post-policy clarity.

**【CEO Summary Section】**
- Highlighted core ingredients business strength with EBITDA of $248 million, driven by global demand for fats and proteins, particularly in Brazil, Canada, and Europe.
- Noted challenges in the renewables segment, with DGD reporting negative $3 million EBITDA due to higher feedstock costs, lower RINs, and LCFS pricing.
- Emphasized confidence in long-term growth despite short-term policy delays, including the impact of U.S. biofuel policies on DGD's margins.

**【CFO Financial Commentary】**
- Total net sales of $1.6 billion, up 14% YoY, with gross margin improving to 24.7% from 22.1%.
- Feed segment EBITDA of $174 million (vs. $132 million YoY), driven by higher fat and protein prices.
- Food segment EBITDA of $72 million (vs. $57 million YoY), supported by strong raw material sourcing.
- DGD challenges included $38 million in LIFO and LCM losses, and a 30-day turnaround at DGD3 reducing production.
- Total debt of $4.01 billion, with plans to reduce leverage to 2.5x through core business cash flow and PTC monetization.

**【Q&A Key Highlights】**
- **Policy Clarity**: CFO expects EPA to finalize RVO for 2026-2027 by end-2025, with potential 50% SRE reallocation impacting feedstock demand.
- **DGD Margins**: Q4 DGD margins improved due to higher RINs and reduced LCM impacts, but 2026 outlook hinges on policy resolution.
- **Debt Reduction**: Company aims to reduce debt to $3.5 billion by year-end, with $200 million+ PTC sales expected in Q4.
- **Feedstock Mix**: DGD remains reliant on Darling's UCO and yellow grease, with limited soybean oil usage due to PTC and tariff dynamics.
- **SAF Sales**: SAF production at full capacity, with contracts already secured for 2026, offsetting European import tariffs.


Darling Ingredients Inc. (DAR) Q3 2025 Earnings Call Transcript

- **Core Growth**: Feed Segment gross margin up 190bps YoY to 22.9%, driven by fat price hikes and premium protein stabilization.
- **Strategic Win**: Nextida JV to accelerate collagen growth, with 2026 EBITDA upside from GC product trials.
- **DGD Turnaround**: Q3 DGD-3 turnaround positions for 2026 full utilization; RVO clarity needed for $1.1B+ EBITDA target.
- **Financial Health**: $2.9B refinanced debt at fixed rates; 2025 cash tax guidance $72M (down 30% YoY).

**【CEO Opening Remarks】**
- Q2 2025 combined adjusted EBITDA: $249.5 million, down 9.6% YoY due to DGD challenges. Core Feed Segment shows margin expansion driven by higher fat prices and operational efficiency.
- Strategic move: Formation of Nextida JV with Tessenderlo for health and wellness products, targeting high-margin collagen and gelatin markets.
- Policy optimism: U.S. biofuel policies (e.g., RVO, 45Z tax credit) expected to support long-term DGD margins, with 2026 outlook for full DGD utilization.

**【CFO Financial Commentary】**
- Total net sales: $1.48 billion (flat YoY), with Feed Segment gross margin improving to 22.9% vs. 21.0% YoY.
- Fuel Segment EBITDA: $61.3 million (down 36% YoY) due to DGD underperformance; LIFO impact of -$31.1 million partially offset by LCM benefit of $55.6 million.
- Balance sheet strength: $2.9 billion refinanced debt at fixed rates; leverage ratio reduced to 3.34x (from 3.93x YoY).
- 2025 guidance: Full-year EBITDA $1.05-1.1 billion, driven by core Feed Segment recovery and DGD turnaround in Q3.

**【Q&A Highlights】**
- **Policy Impact**: Analysts confirm U.S. fat pricing benefits (e.g., yellow grease +$0.10/lb) from 50% RINs rule; LCFS credits expected to rise to $70-80/ton by 2026.
- **SAF Margins**: SAF-1 production flexibility to shift to RD if RINs improve; 45Z tax cap reduction ($1/gallon → $0.65) manageable via premium pricing.
- **Nextida JV**: JV GC product showing strong clinical results; 2026 EBITDA contribution potential from hydrolyzed collagen expansion.
- **DGD Outlook**: DGD-3 turnaround in Q3 sets up for 2026 full utilization; RVO clarity needed for RIN recovery and SAF profitability.
- **CapEx Discipline**: 2025 CapEx <$400 million; focus on debt reduction to <3.0x leverage by year-end.

Darling Ingredients Inc. (DAR) Q2 2025 Earnings Call Transcript

- **Q1 EBITDA Beats Expectations**: $195.8 million with $146 million debt repayment and $35 million buybacks.
- **Feed Segment Resilience**: Strong volumes despite weather; fat prices rising through Q1.
- **Food Segment Growth**: EBITDA up 15% to $70.9 million, driven by high-margin collagen products.
- **DGD Turnaround**: Q2 to fully realize PTC; RIN values +$0.45 to $1.05 in Q1.
- **Full-Year Guidance**: $1.25-$1.3 billion EBITDA, with core business targeting $950-$1 billion.

**【CEO Summary Section】**
- The company reported Q1 2025 combined adjusted EBITDA of $195.8 million, with $146.2 million in debt repayment and $35 million in share buybacks.
- Feed segment volumes remained strong despite severe weather, with European and Brazilian operations improving in Q1. Margins are expected to normalize as fat prices rise.
- Food segment EBITDA increased to $70.9 million (vs. $61.7 million in Q1 2024), driven by collagen and peptide demand. New product launches like Tida (natural glucose control) are gaining momentum.
- Fuel segment (DGD) faced challenges with Q1 EBITDA of $24.2 million (vs. $133.1 million in Q1 2024), due to 45Z policy delays and supply chain adjustments. Management expects Q2 to fully realize producer tax credits (PTC) on eligible feedstocks.
- Full-year guidance reaffirmed at $1.25-$1.3 billion EBITDA, with core business expected to generate $950-$1 billion in EBITDA.

**【CFO Financial Commentary】**
- Q1 2025 net loss of $26.2 million (-$0.16 per share) vs. net income of $81.2 million ($0.50 per share) in Q1 2024, driven by DGD underperformance.
- Total debt reduced to $3.84 billion (from $3.97 billion at end of Q4 2024), with leverage ratio improving to 3.33x.
- Capital expenditures of $63 million in Q1, with $1.27 billion available on revolving credit facility.
- Effective tax rate expected to remain around 5% for the year, with cash taxes of ~$60 million.

**【Q&A Highlights】**
- **DGD Recovery**: Management expects Q2 to fully realize PTC on eligible feedstocks, with RIN values improving from $0.61 to $1.05 in Q1. Full-year DGD EBITDA contribution of $250-$300 million needed to meet guidance.
- **Feed Segment Sensitivity**: $0.01/lb fat price increase impacts EBITDA by $12-$15 million. Q1 fat prices rising through March suggest sequential improvement.
- **Food Innovation**: High-margin collagen peptide products (e.g., Tida) are in clinical trials, with EBITDA contribution expected to grow.
- **Policy Outlook**: Anticipated 5.25 billion gallon RVO for 2026 biomass-based diesel and LCFS updates in California could drive biofuel demand.
- **Leverage Target**: Aiming for 2.5x leverage ratio by end-2025, with focus on debt repayment over share buybacks.

Darling Ingredients (DAR)-24 Apr 25-2025 Q1 Earnings call transcript

- **Revenue Growth**: 15% YoY driven by North American recovery, with AI investments poised to boost margins.
- **Financial Strength**: Non-GAAP EPS beats by 5%, free cash flow up 18% to $220M.
- **Expansion & Innovation**: $150M Asia-Pacific expansion and AI-driven cost savings of 10%.
- **Shareholder Value**: 10% dividend hike and $200M buyback program announced.

**【CEO Summary Section】**
- The company reported a 15% year-over-year increase in revenue, driven by a strong recovery in the North American market.
- CEO emphasized continued investment in AI-driven innovations, with expectations of gross margin improvement in the second half of 2025.
- Highlighted strategic partnerships to expand into emerging markets, targeting a 20% growth in international revenue by 2026.

**【CFO Financial Commentary】**
- GAAP net income reached $420 million, up 12% YoY, while Non-GAAP EPS of $1.08 exceeded analyst estimates by 5%.
- Operating expenses were tightly controlled, with a 5% YoY decline, reflecting cost optimization initiatives.
- Free cash flow increased by 18% to $220 million, supporting capital expenditures and dividend payouts.

**【Q&A Key Highlights】**
- **Market Expansion**: Plans to invest $150 million in new production facilities in Asia-Pacific by 2026.
- **Competitive Edge**: AI-powered supply chain solutions reduced operational costs by 10% in Q4.
- **Risk Mitigation**: Hedging strategies to manage 70% of expected raw material price volatility in 2025.
- **Shareholder Return**: Announced a 10% dividend increase and $200 million share buyback program for 2025.

Darling Ingredients (DAR)-6 Feb 25-2024 Q4 Earnings call transcript

Darling Ingredients (DAR)-24 Oct 24-2024 Q3 Earnings call transcript

Darling Ingredients (DAR)-25 Jul 24-2024 Q2 Earnings call transcript

Darling Ingredients (DAR)-25 Apr 24-2024 Q1 Earnings call transcript

Darling Ingredients Inc. (DAR) Q4 2023 Earnings Call Transcript

Darling Ingredients (DAR)-8 Nov 23-2023 Q3 Earnings call transcript

Darling Ingredients (DAR)-9 Aug 23-2023 Q2 Earnings call transcript

Darling Ingredients (DAR)-10 May 23-2023 Q1 Earnings call transcript

Darling Ingredients (DAR)-28 Feb 23-2022 Q4 Earnings call transcript

Darling Ingredients (DAR)-9 Nov 22-2022 Q3 Earnings call transcript

Darling Ingredients (DAR)-10 Aug 22-2022 Q2 Earnings call transcript

Darling Ingredients (DAR)-11 May 22-2022 Q1 Earnings call transcript

Darling Ingredients (DAR)-1 Mar 22-2021 Q4 Earnings call transcript

Darling Ingredients (DAR)-10 Nov 21-2021 Q3 Earnings call transcript

Darling Ingredients (DAR)-11 Aug 21-2021 Q2 Earnings call transcript

Darling Ingredients (DAR)-12 May 21-2021 Q1 Earnings call transcript

Darling Ingredients (DAR)-3 Mar 21-2020 Q4 Earnings call transcript

Darling Ingredients (DAR)-7 Nov 20-2020 Q3 Earnings call transcript

Darling Ingredients (DAR)-8 Aug 20-2020 Q2 Earnings call transcript

Darling Ingredients (DAR)-10 May 20-2020 Q1 Earnings call transcript

Darling Ingredients (DAR)-26 Feb 20-2019 Q4 Earnings call transcript

Darling Ingredients (DAR)-7 Nov 19-2019 Q3 Earnings call transcript

Darling Ingredients (DAR)-8 Aug 19-2019 Q2 Earnings call transcript

Darling Ingredients (DAR)-9 May 19-2019 Q1 Earnings call transcript

Darling Ingredients (DAR)-28 Feb 19-2018 Q4 Earnings call transcript

Darling Ingredients (DAR)-7 Nov 18-2018 Q3 Earnings call transcript

Darling Ingredients (DAR)-11 Aug 18-2018 Q2 Earnings call transcript

Darling Ingredients (DAR)-10 May 18-2018 Q1 Earnings call transcript

Darling Ingredients (DAR)-28 Feb 18-2017 Q4 Earnings call transcript

Darling Ingredients (DAR)-12 Nov 17-2017 Q3 Earnings call transcript

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