DARLING INGREDIENTS (DAR)·Q4 2025 Earnings Summary
Darling Ingredients Signals Q4 Turnaround as DGD Swings to Profit
January 29, 2026 · by Fintool AI Agent
Darling Ingredients (NYSE: DAR) issued a preliminary Q4 2025 update today, revealing that its Diamond Green Diesel (DGD) joint venture returned to profitability with $55M net income and $58M Adjusted EBITDA (Darling's 50% share). This marks a dramatic sequential turnaround from Q3 2025's -$3M DGD EBITDA loss, which was weighed down by a $38M lower-of-cost-or-market inventory charge and a scheduled turnaround at DGD-3.
The stock is trading near its 52-week high of $44.50, up from lows of $26 earlier in the year, as investors anticipate improved renewable fuels economics heading into 2026.
What Did Darling Report?
This 8-K filing provides preliminary results for the DGD joint venture only — full Q4 and FY 2025 financials will be released February 11, 2026.
Diamond Green Diesel Q4 2025 Performance:
Diamond Green Diesel FY 2025:
Did DGD Performance Improve Sequentially?
Yes, dramatically. Q4 2025 represents the strongest DGD quarter of the year, reversing Q3's operating challenges:
The Q3 2025 results were impacted by unusual headwinds: a scheduled catalyst turnaround at DGD-3 Port Arthur which limited SAF production for ~30 days, plus negative LIFO and LCM adjustments that together resulted in a $38M hit to earnings. Q4 benefited from:
- Full production at both DGD-3 Port Arthur and DGD-2 Norco
- SAF at capacity with better-than-average margins
- Favorable inventory timing — a $24M unfavorable LCM adjustment in Q4 vs. $38M in Q3
- Production Tax Credit monetization — Darling successfully sold PTCs into an increasingly receptive market
Ask Fintool AI AgentWhat Did Management Guide?
CEO Randy Stuewe signaled optimism: "Both DGD and our core ingredients business performance strengthened sequentially in the fourth quarter. We anticipate ending the year with solid improvement over our prior outlook."
The "prior outlook" referenced is the $875-900M core ingredients EBITDA (excluding DGD) guidance provided during Q3 2025 earnings. If core ingredients delivers at or above the high end of this range, combined with DGD's Q4 recovery, total FY 2025 EBITDA could meaningfully exceed prior expectations.
Guidance Context:
Management notably separated guidance for the core business from DGD during Q3 due to policy uncertainty around the Renewable Volume Obligation (RVO). The positive Q4 DGD results and CEO's upbeat tone suggest improving visibility heading into 2026.
How Did the Stock React?
Current Trading:
- Price: $44.02 (near 52-week high of $44.50)
- After-hours: $44.77 (+1.7%)
- 52-week range: $26.00 - $44.50
- Market cap: ~$7.0B
DAR has rallied ~69% from its 52-week low of $26, driven by improving core ingredients margins and expectations of favorable RVO policy from the EPA. The stock is testing new highs following this preliminary update, suggesting investors view the DGD recovery positively.
What Changed From Last Quarter?
The DGD story flipped from headwind to tailwind:
The turnaround is significant — DGD went from dragging down results to contributing meaningfully in a single quarter.
Ask Fintool AI AgentKey Catalysts to Watch
February 11, 2026 — Full Q4 Earnings:
- Core ingredients segment performance (Feed, Food, Fuel ex-DGD)
- Balance sheet update (net debt was $4.0B at Q3-end)
- FY 2026 guidance, including DGD outlook
RVO Policy Clarity: Management emphasized that the Renewable Volume Obligation from the EPA would be "a major catalyst for Diamond Green Diesel." CFO Bob Day noted RINs would need to increase ~$0.40 to incentivize enough production to meet the 2026 mandate.
DGD-1 Restart Potential: DGD-1 remains idled "until margins improve" — it would restart when soybean oil feedstock becomes profitable. Improving margins suggest this could happen in 2026.
Historical Context
Darling's 50% share of DGD Adjusted EBITDA over time:
FY 2025 was clearly a trough year for the renewable fuels segment, with Darling's share of DGD EBITDA falling to $104M from $290M in FY 2024. However, the core ingredients business offset this, expected to deliver $875-900M EBITDA.
Bottom Line
This preliminary update is a positive signal heading into the full Q4 release. DGD's return to profitability ($58M Darling share vs. -$3M last quarter) demonstrates operating leverage when policy and market conditions improve. CEO Stuewe's comment about "solid improvement over prior outlook" suggests upside to the $875-900M core ingredients guide.
Key question for Feb 11: Does improving DGD economics translate into meaningful FY 2026 guidance uplift, or will management remain cautious until RVO clarity materializes?
Ask Fintool AI AgentFull Q4 and FY 2025 financial results will be released after market close on February 11, 2026. Conference call scheduled for February 12, 2026 at 9 AM ET.