Darling Ingredients Inc.

What they do

Darling collects and processes animal by-products, used cooking oil, and bakery residuals into specialty ingredients such as collagen, edible fats, animal proteins, plasma, pet food ingredients, organic fertilizers, yellow grease, and fuel feedstocks. The company also provides grease trap services and, through its Diamond Green Diesel (DGD) joint venture with Valero, converts fats and oils into renewable diesel and sustainable aviation fuel. Operations span five continents with over 150 U.S. processing facilities and 81 international production facilities.

Revenue drivers

• Feed Ingredients — The largest segment, producing non-food grade oils, protein meals, blood products, pet food ingredients, and bakery by-products sold to animal feed, pet food, and biofuel producers.
• Food Ingredients — Collagen products (Rousselot, Gelnex), natural casings, food-grade fats, and heparin, sold to pharmaceutical, nutraceutical, food, and pet food industries.
• Fuel Ingredients — Primarily the DGD joint venture, which converts animal fats and recycled oils into renewable diesel and SAF; also includes biogas production in Europe.
• Environmental Services — Grease trap collection and disposal services for food service establishments; sold majority stake for $90 million in July 2026.

Recent performance

Second quarter 2026 net income was $387.3 million ($2.41 per diluted share) versus $12.7 million ($0.08) a year earlier, on net sales of $1.7 billion (up from $1.5 billion). Combined Adjusted EBITDA was $741.7 million versus $249.5 million in Q2 2025. Six-month net income was $521.6 million versus a net loss of $13.5 million in the prior year period. Full-year 2025 revenue was $6.14 billion with net income of $62.8 million.

Strategy

Darling is focused on operational execution, margin management, and deleveraging, targeting year-end 2026 net debt below $3 billion and leverage below 2x. The company is expanding through acquisitions, having closed on three rendering facilities in Brazil for ~$122 million and divesting non-core grease trap assets. Management emphasizes cash generation, share repurchases ($73 million in Q2 2026), and investment in renewable fuel opportunities including DGD.

Risks

• Commodity price volatility — Product prices are subject to significant swings tied to commodities markets, which can pressure margins.
• Raw material supply competition — The business depends on procuring animal by-products and used cooking oil, a competitive market that could raise costs.
• DGD joint venture dependence — Risks include reliance on Valero and the venture's performance, as well as exposure to government incentives for renewable fuels.
• Regulatory and incentive uncertainty — Renewable energy businesses are highly dependent on government programs and regulations, which could change adversely.

Outlook

Management expects continued earnings growth and cash generation, with momentum building across the business. They guide core ingredients Adjusted EBITDA of $325–340 million for Q3 2026 and expect to end fiscal 2026 with net debt at or below $3 billion and leverage below 2x. The company plans ~$450 million in capital expenditures for 2026.