8-K: Darling Ingredients Reports Q4, FY2025 DGD Earnings

Darling Ingredients announced its Diamond Green Diesel joint venture's fourth quarter and fiscal year 2025 earnings, showing sequential Q4 strengthening despite a full-year net loss.

Summary

• Darling Ingredients' 50/50 joint venture, Diamond Green Diesel (DGD), reported a net income of $55 million for the fourth quarter ended December 31, 2025.
• For the full fiscal year 2025, DGD incurred a net loss of ($68) million.
• Darling Ingredients' share of DGD Adjusted EBITDA was $58 million ($0.41 per gallon) for Q4 2025 and $104 million ($0.21 per gallon) for FY 2025.
• DGD sold/shipped 285.3 million gallons of renewable fuels in Q4 2025 and 1.003 billion gallons for the full fiscal year 2025.
• The JV partner's renewable diesel segment reported approximately $92 million in operating income for Q4 2025 but an operating loss of approximately ($156) million for FY 2025.
• DGD experienced an unfavorable lower of cost-or-market (LCM) inventory valuation adjustment of $24 million in Q4 2025, but a favorable LCM adjustment of $140 million for FY 2025.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a mixed but predominantly negative report. While Q4 showed sequential strengthening and positive net income, the full fiscal year 2025 saw a substantial net loss and operating loss for DGD compared to the prior year, indicating significant challenges.

Positives

• DGD's net income for Q4 2025 was $55.080 million, an increase from $48.072 million in Q4 2024.
• DGD's operating income for Q4 2025 was $65.232 million, up from $48.828 million in Q4 2024.
• Operating revenues for DGD in Q4 2025 increased by $149.636 million compared to Q4 2024.
• Management stated that both DGD and the core ingredients business performance strengthened sequentially in the fourth quarter.
• Management anticipates ending the year with solid improvement over their prior outlook.

Negatives

• DGD reported a net loss of ($68.455) million for the full fiscal year 2025, a significant decline from a net income of $298.164 million in FY 2024.
• DGD's operating loss for FY 2025 was ($30.370) million, a substantial decrease from an operating income of $314.898 million in FY 2024.
• Operating revenues for DGD in FY 2025 decreased by $468.762 million compared to FY 2024.
• Darling's share of DGD Adjusted EBITDA for FY 2025 was $103.716 million, significantly lower than $289.945 million in FY 2024.
• Darling's share of DGD Adjusted EBITDA per gallon for FY 2025 was $0.21, down from $0.41 per gallon in Q4 2025.

Risks

• Issues related to administration, guidance, and/or regulations associated with government policies around renewable fuels, including programs like renewable fuel standards, low carbon fuel standards, renewable fuel mandates, and tax credits for biofuels.
• Issues related to the qualification and sale of tax credits for biofuels, including Section 45Z Production Tax Credits.
• Numerous other factors, many beyond the Company's control, could cause actual results to differ materially from forward-looking statements.

Future Outlook

Management anticipates ending the year with solid improvement over their prior outlook and will provide expanded commentary in upcoming earnings materials. The company expects DGD and its core ingredients business performance to have strengthened sequentially in the fourth quarter.

Management Comments

• "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 and will provide expanded commentary in our upcoming earnings materials."

Industry Context

StockSavvy.ai notes that the renewable fuels sector, particularly renewable diesel, continues to navigate complex regulatory landscapes and commodity price volatility. The performance of joint ventures like Diamond Green Diesel is highly sensitive to government policies, such as renewable fuel standards and tax credits like Section 45Z, which can significantly impact profitability and operational strategies. The sequential strengthening in Q4 suggests some stabilization or improvement in market conditions or operational efficiency after a challenging full year.

Next Steps

• Darling Ingredients will release its full fourth quarter and fiscal year 2025 financial results after market on Wednesday, February 11, 2026.
• A presentation with accompanying supplemental financial data will be available at darlingii.com/investors on February 11, 2026.
• Darling Ingredients will host a conference call on February 12, 2026, at 9 a.m. Eastern Time to discuss the results and provide an update on company operations.
• Expanded commentary on the company's performance will be provided in the upcoming earnings materials.

Key Dates

Recommendation

While the full fiscal year 2025 results for Diamond Green Diesel show a significant decline with a net loss and reduced Adjusted EBITDA compared to the prior year, the sequential strengthening in Q4 2025 and management's positive outlook for year-end improvement suggest potential stabilization. Investors should hold to await the full Darling Ingredients earnings release and conference call on February 11-12, 2026, for a more comprehensive understanding of the core business performance and detailed forward guidance before making further investment decisions.

Keywords

Darling Ingredients, DAR, Diamond Green Diesel, DGD, renewable fuels, renewable diesel, Q4 2025 earnings, FY 2025 earnings, SEC filing, 8-K, financial results, operating income, net income, Adjusted EBITDA, Section 45Z Production Tax Credits, inventory valuation, corporate earnings