Darling Ingredients (DAR) Q1 2026 earnings summary

Executive summary

• Q1 2026 marked a significant turnaround with net sales rising 12.3% year-over-year to $1.6 billion and net income reaching $134.3 million, reversing a prior loss, driven by improved earnings power, operational excellence, and strong contributions from all segments and the DGD Joint Venture.

• Diluted EPS improved to $0.83 from $(0.16) year-over-year.

• Combined Adjusted EBITDA more than doubled to $406.8 million, up 107.8% from $195.8 million in Q1 2025.

• Operating income surged to $226.8 million from $28.4 million year-over-year, reflecting higher prices, volumes, and improved margins.

• Monetized $45 million in Production Tax Credit sales, enhancing liquidity.

Financial highlights

• Gross margin improved to 26.1% from 22.6% year-over-year, with gross margin dollars at $404.9 million.

• Net sales were $1.6 billion, up from $1.4 billion year-over-year.

• Adjusted EBITDA by segment: Feed $168.7 million, Food $80.8 million, Fuel $179.9 million (including DGD share).

• Cash and cash equivalents stood at $116 million; total debt at $4.13 billion; leverage ratio at 3.17x.

• Capital expenditures for Q1 2026 were $94.8 million; $1.1 billion available on revolving credit facility.

Outlook and guidance

• Q2 2026 core ingredients Adjusted EBITDA guidance is $260–275 million.

• Management expects continued earnings growth, stronger cash flow, and further debt reduction throughout 2026.

• DGD is expected to run near full capacity in Q2, with 320 million gallons guided.

• FY 2026 capital expenditures estimated at $400 million, funded by operating cash flows.

• Improving fat and fuel prices, along with regulatory support, are expected to benefit segment outlooks.