The rendered products market sits at roughly $23 billion today, with projections pointing to $29 billion by 2033. Global meat production reached 360 million tonnes in 2023 and is forecast to climb another 16% by 2033, which means a continuously expanding base of animal by-products that must be processed regardless of commodity price swings. Darling's collagen operations, run through Rousselot and Gelnex across 16 plants spanning Europe, China, South America, and the US, sit in a distinctly different competitive register: pharmaceutical and food-grade customers purchase on quality specifications and batch consistency, not spot price.
The Clean Fuels Production Credit is now locked in through 2029 at $1.06 per gallon for on-road renewable diesel and $1.86 per gallon for sustainable aviation fuel - a roughly 75% premium that materially changes the production economics for SAF versus standard renewable diesel. DGD completed its Port Arthur SAF conversion in November 2024, adding approximately 235 million gallons per year of SAF capacity to an existing 1.2 billion gallon network. Airlines are contracting supply years in advance, and a North American feedstock requirement taking effect in 2026 insulates domestic producers from cheaper imported competition. DGD now has the physical infrastructure to meet that contracted demand. The remaining question is the pace of margin recovery as the capacity glut works itself out.
Net income came in at $62.8 million in fiscal 2025, while core Adjusted EBITDA reached $922.6 million - up 16.8% YoY. The gulf between those two numbers has one cause: Diamond Green Diesel. The 50/50 joint venture with Valero - North America's largest renewable diesel producer - swung from $366 million in equity income in fiscal 2023 to a $48.8 million loss in fiscal 2025, as a wave of new industry capacity between 2022 and 2025 compressed margins across the board. Net income followed DGD lower.
The competitive position rests on a physical network that is genuinely difficult to replicate. Darling operates over 150 U.S. processing facilities and 158,300 used cooking oil collection locations — a collection and logistics footprint built over decades. Critically, roughly 91% of raw material volume is acquired on a formula basis, meaning input costs are indexed to finished product prices. That structure limits downside margin exposure in ways that purely commodity-exposed processors cannot match. Tyson, JBS, and Cargill each compete in segments of the market but remain primarily captive or single-stream operations.
The collagen segment operates on fundamentally different economics than the rest of the business. Rousselot's Peptan and Peptinex brands serve pharmaceutical and nutraceutical customers who qualify suppliers on regulatory standing and product consistency — switching costs are high and the relationship to commodity prices is indirect at best. In 2025, Darling entered a definitive agreement with Tessenderlo Group NV to fold both companies' collagen and gelatin operations into a new entity, NewCo Collagen LLC, with Darling retaining an 85% interest.
Revenue recovered to $6.14 billion after the 2024 trough of $5.72 billion, but net income collapsed to $62.8 million - EBITDA held at $1.026 billion while the bottom line was wiped out entirely by DGD. From 2026 the numbers normalise sharply: revenue reaches $6.59 billion, EBITDA returns to its 2023 peak at $1.617 billion, and net income jumps from $62.8 million to $594.6 million in a single year. EBITDA margin recovers from 16.73% to 24.55%, net margin from 1.02% to 9.03%, and ROE from 1.35% to 13.35%. By 2027, revenue reaches $6.82 billion with EBITDA of $1.688 billion and net income of $697 million.
FCF grew from $507 million in 2024 to $679 million in 2025 while reported earnings collapsed - $508.5 million in depreciation and $368 million in DGD distributions kept cash generation intact throughout. CAPEX peaked at $555 million in 2023, stepped down to $381 million in 2025, and stabilises around $393-407 million through 2028 as the heavy investment cycle matures. FCF is expected to reach $626 million in 2026 and $817 million in 2027. Net debt falls steadily from $3.85 billion in 2025 to $2.39 billion by 2028, with leverage dropping from 3.75x Debt/EBITDA to 1.43x.
The 2025’s P/E ratio was at 96.5x and expected to compress to 16.8x, and 14x in 2026 and 2027 respectively, with EPS moving from $0.39 to $3.59 to $4.31 across those three years.. EV/EBITDA sits at 9.55x in 2025 and compresses to 8x in 2026 and 7.3x in 2027.
The group faces risks as the gap between buying raw material and selling finished goods runs up to 60 days in collagen, and price moves in that window hit directly. International volumes are bought at spot, so the formula protection that covers 91% of the U.S. book doesn't travel. Raw material supply is quietly tightening: meat processor consolidation keeps pushing rendering in-house, and UCO theft rises with every uptick in cooking oil prices.
Darling Ingredients benefits from its core rendering, collagen, and collection network continues to generate strong cash flow, while DGD creates upside as renewable diesel and SAF margins recover. With leverage falling, earnings expected to normalize sharply, and valuation compressing as profits rebound, the current setup looks attractive for investors willing to look past short-term noise and focus on the strength of the underlying business.
