Darling Ingredients Posts Q2 Profit Drop

Core Insights - Darling Ingredients reported Q2 2025 revenue of $1.5 billion, slightly above analyst forecasts, but earnings per share fell sharply to $0.08, missing the consensus of $0.24, primarily due to weaker performance in its renewable fuels joint venture, Diamond Green Diesel [1][5][10] Financial Performance - Q2 2025 EPS (GAAP) was $0.08, down 83.7% year-over-year from $0.49 in Q2 2024 [2][5] - Revenue remained flat year-over-year, with a slight increase of 1.8% compared to Q2 2024 [5] - Combined adjusted EBITDA (non-GAAP) decreased by 8.8% to $249.5 million, driven by declining margins in renewable fuels [2][5] Business Overview - Darling Ingredients specializes in repurposing animal by-products and used cooking oil, producing essential ingredients for various industries, including food, pharmaceuticals, and renewable fuels [3] - The company operates 83 production facilities across five continents, serving a diverse customer base [3] Strategic Developments - Recent acquisitions, including Valley Proteins, Gelnex, and FASA Group, have aimed to enhance the company's portfolio in growth areas like specialty collagen peptides and renewable fuels [4] - A new joint venture, Nextida, was announced to develop the global collagen and gelatin business targeting the health and wellness market [9] Challenges and Guidance - The company revised its full-year FY2025 combined adjusted EBITDA guidance down to $1.05 to $1.10 billion from the previous forecast of $1.25 to $1.30 billion, reflecting uncertainties in U.S. renewable fuel policy and the need for improvement at DGD [10][11] - Key areas for investors to monitor include policy clarity, margin recovery at DGD, and the ramp-up of specialty collagen initiatives through the Nextida venture [12]