DAR earnings analysis
What we found in DAR's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Darling delivered a substantially stronger second quarter, with revenue of $1.724 billion, gross margin of 29.2%, operating margin of approximately 32.2%, and diluted EPS of $2.41. Results benefited from higher Feed product prices, Food Ingredients tariff recoveries, and especially DGD-driven Fuel Ingredients earnings. Operating cash flow and working capital improved, although earnings concentration in DGD, policy-sensitive renewable-fuel markets, tariffs, and substantial debt remain material risks.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue and EPS accelerated sharply
- Second-quarter revenue was $1.724 billion, up 15.4% from $1.482 billion in the prior-year quarter and up approximately 11.2% from $1.55 billion in Q1 2026. Diluted EPS was $2.41 versus $0.08 year over year and $0.83 in Q1 2026.
- Broad margin expansion
- Consolidated gross margin increased to 29.2% from 23.3% year over year, while operating income increased to $555.2 million from $75.9 million, implying an operating margin of approximately 32.2% versus 5.1%.
- Feed Ingredients benefited from pricing
- Feed Ingredients revenue rose to $1,149.5 million from $936.5 million, driven by a $209.6 million increase from finished-product prices. Segment operating income increased 277.7% to $150.7 million.
- DGD drove Fuel Ingredients earnings
- Fuel Ingredients operating income increased to $366.8 million from $15.9 million. Management cited higher production volumes, DGD production tax credits, higher RIN values following the 2026-27 EPA rulemaking, and higher diesel prices.
- Operating cash flow strengthened
- Net cash from operating activities increased to $686.5 million for the first six months from $394.8 million, while capital expenditures were $223.6 million versus $133.9 million. Calculated six-month cash flow after reported capex was approximately $462.9 million.
- Liquidity position improved
- Working capital increased to $634.3 million from $518.7 million at January 3, 2026, and unrestricted cash increased to $160.7 million from $88.7 million. Revolver availability remained substantial at $1,308.0 million.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Tariff recoveries may not recur
- The company recognized $18.5 million of net tariff recoveries in Food Ingredients, but stated that new U.S. tariffs and potential retaliation could affect consolidated results. The filing notes that tariff duration, exemptions, refunds, and lower-cost alternative inputs remain uncertain.
- High dependence on DGD and policy
- Fuel Ingredients operating income included $350.0 million of DGD equity income, and DGD represented approximately 20% of six-month revenue, or $662.1 million. Renewable-fuel policy, RIN and LCFS values, production tax credits, and DGD operating performance therefore create significant earnings concentration risk.
- Leverage and 2027 maturity risk
- Debt outstanding included $1.0 billion of 6% Notes, $500.0 million of 5.25% Notes, $857.7 million of euro-denominated 4.5% Notes, $891.0 million under the Term A facility, and $615.8 million of revolver borrowings. The company also stated that it has not decided whether to refinance or repay the $500.0 million 5.25% Notes at their 2027 maturity.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $2.41
- Gross margin
- 29.2%
- Operating margin
- 32.2%
- Segment
- Feed Ingredients: revenue $1,149.5 million, up $213.0 million or 22.7% year over year; gross margin 27.8% versus 22.9%; operating income $150.7 million versus $39.9 million.
- Segment
- Food Ingredients: revenue $408.5 million, up $22.4 million or 5.8% year over year; gross margin 36.3% versus 26.9%; operating income $74.9 million versus $42.6 million.
- Segment
- Fuel Ingredients: revenue $166.1 million, up $7.2 million or 4.5% year over year; gross margin 21.1% versus 17.3%; operating income $366.8 million versus $15.9 million, including $350.0 million of DGD equity income.
What they said about what is next.
No explicit revenue, EPS, or EBITDA guidance was provided in the 10-Q. Management expects approximately $226 million of additional capital expenditures during the remainder of fiscal 2026 and believes operating cash flow, unrestricted cash, and revolver availability will cover needs through the next twelve months.
The filing reads better than the one before it.
What came before.
- 10-Q · May 8, 2026
- Darling Ingredients Inc. reported a strong Q1 2026 with significant improvements in revenue and earnings performance. Revenue of $1.55 billion represented a year-over-year increase of $170.2 million, while diluted EPS…
- 10-K · March 3, 2026
- Darling reports FY2025 revenue of $6,135,877 thousand (up from $5,715,175 thousand in FY2024) while net income attributable to Darling was $62.8 million, reflecting thin net margins. The company emphasizes scale in…
- 10-Q · August 6, 2025
- Darling reported Q2 net sales of $1,481,518,000 and diluted EPS of $0.08 for the three months ended June 28, 2025. Revenue rose modestly versus the prior-year quarter (+$26.226M) and the prior quarter (+$101.6M), but…
- 10-Q · November 6, 2024
- Darling reported Q3 total net sales of $1,421,891 (in thousands), down from $1,625,204 in the prior-year quarter, with operating income falling to $60,107 (in thousands) and diluted EPS of $0.11 vs $0.77 a year earlier.…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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