Earning Preview: Darling Ingredients revenue is expected to increase by 5.80%, and institutional views are limited
Abstract
Darling Ingredients will report quarterly results on February 11, 2026 Post Market, with investors watching for a revenue estimate of USD 1.54 billion, EPS of 0.40, and margin commentary as the company navigates a mixed pricing environment and balances feed versus fuel contributions.Market Forecast
Consensus projections for the current quarter point to revenue of USD 1.54 billion, implying a 5.80% year-over-year increase, with EBIT of USD 130.13 million, up 3.14% year-over-year. Adjusted EPS is estimated at 0.40, reflecting a year-over-year decline of 13.63%. Forecasts available to us do not include a gross profit margin or net profit margin estimate for this quarter.The main business is expected to remain anchored by feed ingredients, which delivered USD 1.03 billion in the prior quarter and accounted for 65.80% of total revenue; the outlook hinges on stable operating rates, disciplined procurement, and pricing resilience across core categories. Within the portfolio, fuel ingredients offers the greatest optionality for incremental growth given its operating leverage to spreads and utilization, though last quarter revenue was a smaller USD 154.28 million and year-over-year growth by segment was not provided in the available dataset.
Last Quarter Review
In the previous quarter, Darling Ingredients generated revenue of USD 1.56 billion (up 9.99% year-over-year), posted a gross profit margin of 24.75%, recorded GAAP net profit attributable to the parent company of USD 19.36 million with a net profit margin of 1.24%, and delivered adjusted EPS of 0.12 (up 9.09% year-over-year). A notable financial highlight was the quarter-on-quarter rebound in GAAP net profit, which rose by 52.93%, underscoring improving operating discipline and cost execution against a complex pricing backdrop. By business line, feed ingredients contributed USD 1.03 billion (65.80% of revenue), food ingredients delivered USD 380.57 million (24.33%), and fuel ingredients contributed USD 154.28 million (9.86%); year-over-year growth by segment was not available in the data returned.Current Quarter Outlook
Feed Ingredients: revenue durability and margin path
The primary revenue engine remains feed ingredients, which delivered USD 1.03 billion last quarter and comprised 65.80% of total revenue. This quarter’s top-line estimate of USD 1.54 billion and EPS of 0.40 presuppose a steady volume cadence and a largely stable price-cost spread within feed categories, with EBIT projected at USD 130.13 million that implies modest year-over-year growth of 3.14%. With last quarter’s gross margin at 24.75% for the consolidated group, incremental margin progression in feed likely relies on procurement optimization and mix rather than broad price acceleration. Given that last quarter’s GAAP net margin was 1.24% on USD 1.56 billion of revenue, the company’s priority appears to be converting gross profits into operating earnings through tighter expense control and improved throughput. For this quarter, watch for commentary on operating rates, input-cost normalization, and whether efficiency gains can offset any price softness, as that will be key for reconciling the forecasted EPS of 0.40 with the EBIT estimate and the recent margin history.A second element within feed is the balance between contract and spot dynamics. If the company maintains a disciplined pricing posture where contracts lag spot inputs by a manageable interval, gross margin volatility can be muted even if receipts fluctuate. The quarter-on-quarter surge in GAAP net profit last period (up 52.93%) suggests operating expenses and non-operating items were managed effectively; sustaining that momentum would support a more durable conversion from gross to net income. This quarter’s print should clarify whether the improved earnings cadence reflects a structural reset in costs or was aided by transient tailwinds in the prior period; investors will triangulate revenue mix in feed with commentary on procurement savings, logistics efficiency, and plant utilization to assess margin durability.
Fuel Ingredients: operating leverage and contribution
Fuel ingredients contributed USD 154.28 million last quarter, representing 9.86% of total revenue. Despite its smaller base, the segment can exert an outsized influence on consolidated variability due to its operating leverage to price spreads and utilization. The current quarter’s consolidated EPS estimate of 0.40 (down 13.63% year-over-year) suggests the market embeds conservatism on the net income line, making the trajectory of this segment’s margins a meaningful swing factor. If fuel spreads and run rates track the prior quarter’s levels, EBIT of USD 130.13 million may be achievable in aggregate; any outperformance would likely require better throughput or favorable spread capture within fuel ingredients. Conversely, if spreads compress or throughput is curtailed, the segment’s contribution could dilute consolidated profitability, reinforcing the need for efficiencies and disciplined hedging strategies within the broader portfolio.From a cash conversion perspective, last quarter’s 24.75% gross margin at the group level indicates there is cushion to absorb some variability, but net margin at 1.24% underscores that interest, tax, and below-the-line items matter for EPS delivery. Fuel’s profitability sensitivity to incremental volume implies that even modest operational improvements can materially impact the bottom line. This makes management’s commentary on planned run rates, maintenance schedules, and expected throughput vital for interpreting the quarter’s EPS against the 0.40 estimate. At the same time, investors will monitor whether SG&A and other fixed costs are aligned with activity levels to protect net margin. The degree to which fuel ingredients can sustain, or improve upon, its prior-quarter revenue base without sacrificing unit economics will influence whether EBIT can meet or exceed the USD 130.13 million forecast and help mitigate the anticipated year-over-year EPS decline.
Main business balance and EPS bridge
With revenue forecast at USD 1.54 billion, an analytical bridge from revenue to EBIT and EPS emphasizes cost control, mix, and non-operating expenses. Last quarter, the company converted a 24.75% gross margin into a 1.24% net margin and USD 19.36 million of GAAP net profit; the subsequent rise in adjusted EPS to 0.12 aligned with an EBIT of USD 71.73 million. The current quarter’s EBIT estimate of USD 130.13 million implies sequential improvement, which would require either higher gross profit dollars or better operating leverage on a comparable gross profit base. Given the EPS estimate is 0.40, management discipline around depreciation, amortization, interest, and taxes will be closely scrutinized because small changes in these line items can materially impact EPS at current net margin levels. Investors will be looking for clear guidance on the sustainability of the cost structure that underpinned last quarter’s quarter-on-quarter net profit increase of 52.93%.The mix between feed ingredients and fuel ingredients will also shape how gross margin trends relative to last quarter’s 24.75% metric. If mix skews toward higher-margin categories within feed ingredients, consolidated margin could hold or improve even if unit volumes are stable. Alternatively, if mix tilts to lower-margin channels, EBIT may need to rely on efficiency gains to hit USD 130.13 million. The absence of publicly available margin guidance in the current forecast set means attention will focus on management’s qualitative commentary and any quantitative markers offered around unit margins and utilization.
What could move the stock this quarter
Three variables appear poised to drive the share price reaction: the revenue print relative to the USD 1.54 billion estimate, the EBIT delivery against USD 130.13 million, and the EPS outcome versus 0.40. A clean beat on revenue alongside stable or better gross margins versus last quarter’s 24.75% would likely support the EBIT estimate and ease concerns over the projected year-over-year EPS decline of 13.63%. Conversely, if revenue meets expectations but the EBIT margin underwhelms due to mix or costs, the market may question the sustainability of expense savings that helped last quarter’s quarter-on-quarter net profit improvement. Clarity on the net income bridge—particularly interest expense and effective tax rate—will be critical to aligning EPS with operating performance, given last quarter’s net margin was 1.24%.Disclosures around operational cadence will also matter. Any signal on throughput, procurement discipline, or logistics improvements within feed ingredients would help investors judge the durability of revenue and gross profit dollar generation. In fuel ingredients, visibility into planned run rates and spread capture will frame the opportunity for upside or the risk of incremental margin pressure. Finally, commentary on capital allocation—such as maintenance investment levels and working-capital discipline—will help assess cash conversion, which is increasingly relevant given the gap that can emerge between EBIT and EPS when net margins are thin. The interplay of these factors will shape the market’s interpretation of the quarter’s results beyond the headline EPS.
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