Darling Ingredients Reports Significant FY2025 Profit Decline Amid DGD Loss and Restructuring
Summary
Darling Ingredients reported a sharp decline in full-year 2025 net income and EPS, largely due to a loss from its Diamond Green Diesel joint venture and restructuring charges, despite strong Q4 EBITDA growth and deleveraging.
Key Events
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Full-Year Net Income Plummets
Net income for fiscal year 2025 fell to $62.8 million ($0.39 diluted EPS) from $278.9 million ($1.73 diluted EPS) in fiscal year 2024, a significant decline.
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Diamond Green Diesel (DGD) Posts Loss
The DGD joint venture contributed a net loss of $48.77 million to equity in net income for FY2025, a reversal from a $149.08 million net income contribution in FY2024.
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Restructuring Charges Impact Results
The company incurred $58.0 million in restructuring and asset impairment charges in Q4 2025 due to strategic portfolio realignment.
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Strong Q4 EBITDA and Sales Growth
Despite full-year challenges, Q4 2025 saw combined Adjusted EBITDA increase to $336.1 million from $289.5 million year-over-year, with total net sales rising to $1.7 billion from $1.4 billion.
Analysis
Darling Ingredients reported a substantial decrease in net income and diluted EPS for both Q4 and the full fiscal year 2025. This significant decline was primarily driven by a challenging year for its Diamond Green Diesel (DGD) joint venture, which shifted from a substantial net income contribution in the prior year to a net loss contribution in FY2025. Additionally, the company incurred $58 million in restructuring and asset impairment charges related to strategic portfolio realignment. Despite these headwinds, the company achieved strong Q4 Adjusted EBITDA growth, increased total net sales, and successfully monetized production tax credits, contributing to a notable reduction in its bank leverage ratio. The outlook for core ingredients in Q1 2026 is positive, but the overall financial performance for the year reflects significant challenges in its fuel segment.
At the time of this filing, DAR was trading at $47.75 on NYSE in the Manufacturing sector, with a market capitalization of approximately $7.8B. The 52-week trading range was $26.00 to $49.74. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.