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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

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

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Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

DAR

DAR fundamentals

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