Darling Ingredients Profit Soars as Diamond Green Diesel Rebounds; Net Debt Cut by $420 Million

Darling Ingredients' third-quarter profit soared to $267.0 million on Wednesday from $19.4 million a year earlier, as its renewable diesel joint venture swung back to profit and its animal-byproduct feed business posted sharply higher earnings.

The Irving, Texas-based rendering and renewable fuels company reported net income attributable to Darling of $1.67 per diluted share, compared with $0.12 a year ago, according to the earnings release it filed with an 8-K on Wednesday. Total net sales rose to $1.8 billion from $1.6 billion.

Combined adjusted EBITDA, the company's preferred profit measure, more than doubled to $514.3 million from $244.9 million. Darling reaffirmed its fiscal 2026 guidance for combined adjusted EBITDA of $2.2 billion to $2.3 billion.

Diamond Green Diesel turns around

The biggest swing came from Diamond Green Diesel, Darling's renewable fuels joint venture. Darling booked $165.6 million of equity income from DGD in the quarter, compared with a loss of $45.8 million a year earlier.

DGD sold or shipped 314.9 million gallons of renewable fuels in the quarter, and Darling calculated DGD adjusted EBITDA at $1.30 per gallon. Darling received $171.0 million in cash distributions from the venture, including about $33.4 million in dividends and about $137.6 million from production tax credit sales.

The quarter also included a $63.5 million gain on the sale of businesses.

Feed segment leads the core

"Our core business delivered another quarter of exceptional performance, demonstrating its resilience and strong cash flow generation," Chairman and CEO Randall C. Stuewe said in the release.

Feed Ingredients, the largest segment, grew net sales to $1.21 billion from $1.03 billion, and its adjusted EBITDA rose to $247.7 million from $174.0 million. Food Ingredients adjusted EBITDA edged up to $73.8 million from $71.6 million on sales of $415.8 million.

Paying down debt

Darling used the cash to cut net debt by about $420 million in the quarter and to buy back $75.9 million of its stock, bringing repurchases through the third quarter to $149.4 million.

"With a strong balance sheet and a great outlook, the momentum is undeniable as we position the company for a successful 2027," Stuewe said.

As of Oct. 3, Darling had total debt of $3.5 billion, $121.7 million in cash and $1.7 billion available under its revolving credit facility. Its preliminary bank covenant leverage ratio was 1.7 times. The company said it expects to end fiscal 2026 with net debt at or below $3.0 billion and a leverage ratio below 1.5 times.

Nine-month picture

For the first nine months, net income attributable to Darling reached $788.6 million, or $4.91 per diluted share, compared with $5.9 million, or $0.04 per share, a year earlier. Net sales rose to $5.1 billion from $4.4 billion, and combined adjusted EBITDA reached about $1.7 billion versus $690.2 million.

Capital expenditures totaled about $343.5 million year to date, and Darling expects roughly $450.0 million for the full year.

Sources

1. Darling Ingredients Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 28, 2026 (accession 0000916540-26-000027)

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