Core Insights - Darling Ingredients reported a significant decline in GAAP EPS to $0.08, missing the consensus estimate of $0.24, primarily due to weak profitability in its Diamond Green Diesel joint venture [1][5] - Revenue for the second quarter of fiscal 2025 was $1.5 billion, slightly above expectations, but profitability metrics indicated ongoing challenges [1][5] - The company lowered its full-year Combined Adjusted EBITDA guidance to $1.05–$1.10 billion, down from previous estimates of $1.25 to $1.3 billion, reflecting persistent headwinds in the renewable fuels market [1][11] Financial Performance - Q2 2025 EPS was $0.08, down 83.7% year-over-year from $0.49 in Q2 2024 [2] - Revenue increased by 2.7% year-over-year, from $1.46 billion in Q2 2024 to $1.5 billion in Q2 2025 [2] - Adjusted EBITDA for Q2 2025 was $249.5 million, an 8.8% decrease from $273.6 million in Q2 2024 [2][5] Business Overview and Strategy - Darling Ingredients specializes in converting animal by-products, used cooking oils, and food waste into value-added ingredients for various markets, operating over 260 facilities globally [3][4] - The company's strategy focuses on product diversification to reduce dependence on any single market, addressing sectors like agriculture, pharmaceuticals, and renewable energy [3][4] Segment Performance - The Feed Ingredients segment generated net sales of $936.5 million, contributing significantly to overall revenue, supported by strong fat prices [6][8] - The Food Ingredients segment reported net sales of $386.1 million, with a 1.9% increase year-over-year, and includes the launch of the Nextida joint venture targeting health and wellness markets [6][9] - The Fuel Ingredients segment, heavily impacted by the Diamond Green Diesel joint venture, recorded revenue of $158.8 million, with a significant decline in profitability due to regulatory uncertainties and market dislocations [6][10] Future Outlook - The company anticipates continued improvement in its core ingredients business, particularly in the Feed Ingredients segment, driven by strengthening fat prices [6][11] - Management emphasized the importance of maintaining balance sheet health and focusing on high-margin product categories, especially in food ingredients and collagen innovation [11][12] - Investors are expected to monitor operational metrics across segments, particularly for signs of margin improvement and the performance of the Nextida joint venture [12]