Financial Data and Key Metrics Changes - For Q4 2025, combined adjusted EBITDA was $336.1 million, up from $289 million in Q4 2024 and $245 million in Q3 2025 [11][12] - Total net sales for Q4 2025 were $1.7 billion, compared to $1.4 billion in Q4 2024 [12] - Gross margins improved to 25.1% in Q4 2025 from 23.5% in Q4 2024 [12] - For the full year 2025, core ingredients EBITDA was $922 million, up from $790 million in 2024 [11] Business Line Data and Key Metrics Changes - In the feed segment, Q4 2025 EBITDA improved to $193 million from $150 million a year ago, with total sales of $1.13 billion compared to $924 million [12] - The food segment saw total sales for Q4 2025 reach $429 million, up from $362 million in Q4 2024, with EBITDA increasing to $82 million from $64 million [13] - The fuel segment, specifically Diamond Green Diesel (DGD), delivered $57.9 million of EBITDA in Q4 2025, marking its strongest quarter of the year [6][14] Market Data and Key Metrics Changes - In the U.S., demand for domestic fats remains robust, supported by favorable agricultural and energy policies [6] - Internationally, the global rendering business in Europe, Canada, and Brazil showed solid year-over-year growth [6] - DGD sold approximately 1 billion gallons in 2025, earning $103.7 million of EBITDA, reinforcing its position as the lowest cost operator [7] Company Strategy and Development Direction - The company aims to be the world's largest and most profitable processor of animal byproducts, focusing on core strengths and operational excellence [4] - The company is open to opportunities that strengthen its core business, including potential asset sales and acquisitions, such as the stalking horse bid for rendering facilities in Brazil [9][71] - The company is optimistic about the policy backdrop for renewable fuels, which is expected to enhance DGD's earning potential [8] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertainties from evolving renewables public policy and trade-related challenges but emphasized a commitment to operational fundamentals [4] - The company is optimistic about 2026, expecting positive global demand trends and improved margins in the fuel segment [6][20] - Management anticipates that DGD will produce about 260 million gallons in Q1 2026 at improved margins [20] Other Important Information - The company recorded an income tax benefit of $11 million for Q4 2025, with an effective tax rate of -15.3% [18] - Total debt net of cash was approximately $3.8 billion at year-end 2025, down from $4 billion at the end of 2024 [16] - Capital expenditures totaled $156 million in Q4 2025 and $380 million for the fiscal year [17] Q&A Session Summary Question: Guidance for DGD margins and potential inclusion in future guidance - Management indicated that future guidance for DGD will depend on clarity regarding the Renewable Volume Obligation (RVO) [26][28] Question: Sensitivity of the feed business to RVO changes - Management noted that the feed business is sensitive to policy changes, particularly regarding tariffs and feedstock values [29] Question: Insights on biofuels production and feedstock demand - Management stated that there hasn't been a significant increase in biofuel production yet, and better margins are needed to incentivize more production [31][32] Question: Expectations for the food business and EBITDA - Management expressed optimism for the collagen and gelatin business, expecting a year similar to or better than the previous year [34] Question: RVO expectations and implications for Darling - Management supports an RVO for advanced biofuels translating to 5.25 billion gallons or more, which would be constructive for margins [40] Question: Potential for incremental asset sales - Management indicated that asset sales would be opportunistic and based on fair market value assessments [71]