Darling Ingredients' third quarter results were met with a negative market reaction as the company missed Wall Street’s revenue expectations and reported a significant shortfall in adjusted EBITDA. Management pointed to several temporary headwinds that affected operational performance, including the timing of sales, accounting adjustments in North American fat sales to Diamond Green Diesel, and a third-party hydrogen outage that impacted production. CEO Randall Stuewe described the period as “slightly impacted by timing of sales and global compensation expense,” while also emphasizing ongoing operational improvements and resilience in the core global ingredients business.
Is now the time to buy DAR? Find out in our full research report (it’s free for active Edge members).
Darling Ingredients (DAR) Q3 2026 highlights:
- Revenue $1.79 billion vs S&P analysts’ estimates of $1.80 billion (14.5% year-on-year growth, 0.8% miss)
- Adjusted EPS $1.70 vs S&P analysts’ estimates of $1.66 (2.7% beat)
- Operating margin 18.6%, up from 4.6% in the same quarter last year
- Market capitalization $8.70 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our top 5 analyst questions from Darling Ingredients’s Q3 earnings call
- Derrick Whitfield (Texas Capital Bank) asked about margin volatility and hedging risk in Diamond Green Diesel. CFO Bob Day explained that quarter-to-quarter swings reflect timing, and hedge losses typically reverse in subsequent quarters, emphasizing longer-term performance over short-term movements.
- Manav Gupta (UBS) questioned when Darling Ingredients might consider a dividend or larger buybacks as leverage falls. CEO Randall Stuewe responded that capital return options are under board discussion and will depend on reaching the $2.5 billion net debt threshold.
- Tom Palmer (JPMorgan) sought clarification on base business EBITDA expectations for Q4. Stuewe provided a range and noted confidence in delivering results consistent with annual guidance, while CFO Day explained that core segment profitability is increasingly influenced by Diamond Green Diesel’s performance and accounting effects.
- Conor Fitzpatrick (Bank of America) inquired about the impact of low-carbon fuel standards on medium-term profitability. Day said LCFS growth offers a safety net to margins if federal mandates weaken, and expects core ingredients to comprise a larger share of EBITDA over time.
- Andrew Strelzik (BMO Capital Markets) asked about ongoing tariff effects and the food segment’s outlook. Day responded that tariff disruptions are temporary, with demand for water-soluble collagen remaining strong and expected to recover as global supply chains adjust.
Catalysts in upcoming quarters
In the coming quarters, the StockStory team will be watching (1) how quickly inventory and hedging effects in the feed and fuel segments normalize, (2) the pace of debt reduction and any announcements on dividends or expanded share buybacks, and (3) continued demand strength in protein and collagen markets amid ongoing tariff and regulatory developments. Execution on the Tessenderlo joint venture and product innovation initiatives will also be key signposts for sustained growth.
Darling Ingredients currently trades at $55.20, in line with $55.47 just before the earnings. Is there an opportunity in the stock? The answer lies in our full research report (it’s free).
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