Thank you for joining the Darling Ingredients first quarter 2026 earnings call. Here with me today are Mr.

Randall C. Stuewe, Chairman and Chief Executive Officer, and Mr.

Bob Day, Chief Financial Officer. Our first quarter 2026 earnings news release and slide presentation are available on the Investor page of our corporate website and will be joined by a transcript of this call once it is available.

During this call, we will be making forward-looking statements, which are predictions, projections, or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties.

Actual results could materially differ because of factors discussed in today's press release and the comments made during this conference call and in the risk factors section of our Form 10-K, 10-Q, and other reported filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statement.

Now, I will hand the call over to Randy.

Thanks, Suann. Good morning, everyone, and thanks for joining us.

Over the last few years, public policy uncertainty and deflationary and volatile commodity markets created a challenging operating environment. During that time, Darling Ingredients remained laser-focused on controlling what we could control.

We prioritized operational excellence and maintained strict, disciplined capital allocation with a goal to achieve a meaningful debt reduction. Headwinds have now shifted, and the results we share today confirm a much more favorable operating environment.

We're moving forward with significantly improved earnings power, stronger cash flow potential, and a more robust foundation for long-term value creation. For the first quarter of 2026, we saw the operating environment allow for expected EBITDA growth and sequential gross margin improvement.

Darling's core ingredients business really delivered this quarter, with improved global operations, margin expansion, and focused commercial execution. Combined adjusted EBITDA for first quarter was $406.8 million, including $255.6 million from our global ingredients business and $151.2 million from Diamond Green Diesel.

Our Feed Ingredients segment had a fantastic quarter. We saw steady volumes, with a strong global poultry volumes offsetting stagnant North American cattle herd.

Operational excellence remained a key focus this quarter, driving improvements in throughput, cost reduction, and product quality that translated into stronger gross margins. At the same time, our commercial agility allowed us to pivot sales to higher-priced markets.

While fat prices were softer earlier in the quarter, our disciplined risk management approach, combined with spot sales, helped us mitigate the typical lag impacts we would see in that environment. The Renewable Volume Obligation announced at the end of March has been extremely constructive for Darling and DGD.

We are already seeing a favorable movement on fat prices as renewable diesel demand grows. DGD overcame a shutdown at Port Arthur that briefly interrupted our supply chain.

As those dynamics continue to play out, we anticipate this to be a nice tailwind for our feed segment for the remainder of 2026. Turning to our Food segment, we are seeing nice growth in collagen, particularly in Europe and Asia.

Sales in both collagen and gelatin improved year-over-year, reflecting not only increased customer demand, but new applications for collagen in food, nutrition, and health products. Our Nextida glucose control product is currently pending a patent in both in the U.S.

for production processes and the use of Nextida as a dietary supplement ingredient, offering a non-pharmaceutical option targeting lower blood glucose. With an interest in food as medicine and increased demand for protein, collagen continues to be positioned well for growth.

Now, as you can see in our results, our Fuel segment is at an inflection point as renewables margins turned a corner with finalization of the Renewable Volume Obligation. With a very constructive RVO and now a clear path forward, we expect DGD's results to continue to strengthen throughout the year.

Diamond Green Diesel delivered a strong quarter with $151.2 million of EBITDA, or around $1.11 EBITDA per gallon. Our non-DGD green energy businesses continue to deliver stable earnings, will have the opportunity for a slight tailwind due to increased energy prices in Europe.

Now with that, I'd like to turn the call over to Bob to take us through some financials, then I'll come back and discuss my thoughts on the second quarter. Bob?

Thank you, Randy. Good morning, everyone.

As Randy said, first quarter was very strong across all measures, and the Darling platform is poised to move forward with significantly improved earnings power. For the quarter, combined adjusted EBITDA was $407 million versus $196 million in first quarter 2025 and $336 million last quarter.

Core ingredients non-DGD improved both year-over-year and sequentially. For first quarter 2026, core ingredients EBITDA was $256 million versus $190 million in first quarter 2025 and $278 million last quarter.

Total net sales were $1.6 billion versus $1.4 billion. Raw material volume was 3.8 million metric tons, essentially unchanged.

Meanwhile, gross margins for the quarter improved to 26.1% compared to 22.6% in the first quarter last year and from 25.1% last quarter. Looking at the Feed segment for the quarter, EBITDA improved to $169 million from $111 million a year ago, while total sales were $985 million versus $896 million, and raw material volume was flat at approximately 3.1 million metric tons.

Gross margins relative to sales improved nicely to 25.3% in the first quarter versus 20.3% in the first quarter from last year and 24.6% in the fourth quarter of 2025. In the Food segment, total sales for the quarter were $405 million compared to $349 million in the first quarter of 2025.

Gross margins for the Food segment were 28.9% of sales compared to 29.3% a year ago, and raw material volumes were flat at around 330,000 metric tons compared to the same time last year. EBITDA for first quarter 2026 was $81 million versus $71 million in first quarter of 2025.

In the Fuel segment, starting with Diamond Green Diesel, Darling's share of DGD EBITDA for the quarter was $151 million, which includes a favorable LCM inventory valuation adjustment of $97 million at the DGD entity level, and sales of around 272 million gallons and average EBITDA margin of $1.11 per gallon. Darling contributed approximately $190 million to DGD during the quarter, mainly to provide short-term working capital, most or all of which is expected to be returned in subsequent quarters.

In addition, during the quarter, Darling monetized $45 million in production tax credit sales, the proceeds of which will be paid in the coming quarters. Other Fuel segment sales not including DGD were $160 million for the quarter versus $135 million in 2025 on strong energy and biogas prices in Europe and relatively flat volumes of around 370,000 metric tons.

Combined adjusted EBITDA for the full Fuel segment including DGD was roughly $180 million for the quarter versus $24 million in the first quarter of 2025. As of quarter-end, total debt net of cash was approximately $4 billion versus $3.8 billion ending fourth quarter 2025.

The increase in debt results from contributions to DGD mentioned earlier and timing of production tax credit payments, some of which will come in the second quarter. Capital expenditures totaled $95 million in the quarter.

Our bank covenant preliminary leverage ratio was 3.17 times as of quarter-end versus 2.9 times at year-end 2025. In addition, we ended the quarter with approximately $1.1 billion available on our revolving credit facility.

We recorded an income tax expense of $38.6 million for the quarter, yielding an effective tax rate of 22%. That rate, excluding the impact of the production tax credit and discrete items, was 32%, and we paid $20.5 million in income taxes in the first quarter.

For 2026, we expect the effective tax rate to be around 25% and cash taxes of approximately $60 million for the remainder of the year. Overall, net income was approximately $134 million for the quarter, or 83 cents per diluted share, compared to a net loss of $26 million, or negative 16 cents per diluted share, for the first quarter of 2025.

Last quarter, we mentioned that we have some assets held for sale that are not considered strategic for our business. Those asset sales continue to move forward, but have not yet closed.

Of those, we have signed an agreement to sell the majority of our grease trap environmental service assets. The sale is pending some permitting transfers, which we expect to be completed in the next few months.

We'll have more to say about the trap and other businesses for sale at a later date. With that, I will turn the call back over to Randy.

Thanks, Bob. In closing, the progress we shared with you today reflects the discipline and focus we have maintained through a challenging cycle.

By controlling what we could control, driving operational excellence, prioritizing capital, and focusing on balance sheet strength, we position Darling Ingredients to emerge stronger. With improved, but volatile market conditions and a much-improved regulatory framework, we believe the company is entering its next phase with momentum that we expect to build as the year progresses.

We believe that as the year progresses, we'll drive improved earnings, stronger cash flow, additional debt reduction, and long-term value creation for our shareholders. Ultimately, our improved performance will once again provide the company with many opportunities.

This confidence is reflected in our core ingredients EBITDA guidance for Q2, which we are now setting at $260 to $275 million for the quarter. With that, we'll go ahead and open it up to Q&A.

Good morning. Thank you for the questions.

I was just wondering, first of all on Diamond Green, do you expect that to reverse in Q2 or will that take longer throughout the year?

Thanks, Heather. This is Bob.

We did realize a lower of cost or market benefit in the first quarter. I think just to make sure everyone's aware, in order to have the opportunity to realize the benefit in lower of cost or market, you have to have previously taken a loss from that.

This quarter, that $97 million at the DGD entity level, that exhausts all available lower of cost or market. Going forward, as long as the business is profitable, we do not anticipate any lower of cost or market benefits.

Then to your question of LIFO, the LIFO will be based on an average cost paid for feedstock during the period. As the average price increases, if it increases, then we would realize a LIFO loss that is embedded inside of the results.

If feedstock prices on average decrease, then there would be a LIFO gain. Really the answer to your question depends on your view of feedstock prices as the average cost of feedstocks paid in the period in question relative to the period prior.

What about on the hedging side?

Yeah.

Yeah.

Hedges, I guess what I can say about that is at DGD, we do hedge. We're very disciplined about hedging.

There is some flexibility in terms of which instruments we use to hedge our risk, and we don't disclose that for competitive reasons. I think what you can point to this quarter is that clearly we had a significant increase during the period in heating oil futures, and in crude oil futures, and in soybean oil, whatever sort of instrument you're looking at.

We manage to absorb the cost of whatever hedges we had and still put out a very positive result. I think it just speaks to the risk management capabilities of the business.

Okay. Then

my follow-up is just given the volatility we're seeing in the energy markets and the feedstock markets, this question seems particularly relevant. I was wondering if you could update us on how we should be thinking about the lags in your model, both core DAR and Diamond Green.

I remember at one point, it was more like 30 to 60 days, and then I think it increased to 60 to 90. If you could just update us on how we should be thinking about that.

Yeah. Heather, this is Randy.

Clearly, you've kind of framed it pretty well. What we saw in Q1, remember as we came out of Q4, if you remember, we had forward sales into DGD getting ready to run full that were put on in October as we anticipated the RVO, and then we saw prices soften as the RVO kept getting kind of delayed and delayed.

Ultimately, as we came into Q1, cash prices, FOB the most of the North American factories were actually flat or lower than Q4. Those have now accelerated.

They started to accelerate in really here in March for us. That'll start to flow through very nicely in Q2.

When we look at our global rendering business, what we've seen is the tariffs have impacted Brazil pretty sharply. We've had to adjust all of our pricing models down there, what we procure raw material from.

That takes 30 to 60 days. I think we've righted that now.

Overall, the ingredients business will have a stronger Q2. How much of the acceleration in prices flow through, that would be reflected in our kind of our conservative approach to guidance there.

Remember, as I was telling the team here, this is the first call we've done where we haven't ever seen period one of the next quarter, and we won't see those numbers for another week or two, week and a half. Ultimately, really we're looking at basically a March run rate and extrapolating that with some improvement.

You'll see that. Conversely, DGD has done a very nice job of getting out in front of this.

We've had a strong bias that feedstock prices would accelerate once the industry wakes up. That should flow through in much better margins in DGD as we go through Q2 and through the balance of the year.

Sorry, was on mute. Hi, it's Tom.

Morning and thanks for the question. Maybe start out with an industry question, especially when I think about the biofuel side, there's probably a good amount of idle capacity.

I wonder what you think the U.S. biofuels industry is capable of producing currently and then once kind of it fully ramps and whether that's going to be enough to kind of fulfill mandates or if we do need to kind of shift to imports even with the maybe less favorable tax treatment?

Thanks.

Thanks, Tom. This is Bob.

Look, the first thing I'd say is, we do believe that quite a bit of biofuel capacity is back online. Margins are attractive enough to bring a lot of that back.

There's still an opportunity to bring some more. Ultimately, to answer your question about what we're capable of, it's going to depend a lot on run rates as well as just kind of bringing idle capacity back on to market.

I think as everyone knows, keeping a renewable diesel unit up and running, it's got its own challenges to it and circumstances. It's going to depend a lot on that.

Bottom line is, we think that the industry is capable of meeting the demand of the RVO. It probably is a combination of some of the things you talked about.

It will include some imports of fuel, probably fewer exports as the U.S. market margins need to just incentivize U.S.

production to stay in the United States. When you put all those things together, and adding capacity and running hard as an industry, and you look at what we did in 2024, it's reasonable to expect that we can meet the demands of the RVO.

Thank you for that. A follow-up on second quarter expectations, when we think about 2Q, what are kind of the key drivers of the increase in terms of EBITDA in the base business?

Is it mainly just higher market prices in terms of fat, and does that range contemplate where prices are today or that there are any changes relative to that run rate? Thanks.

Yeah. There's always a bit of seasonality in the business here.

I've always said when the ballparks open, at least in North America, you'll see a few more in barbecue season. Really at the end of the day, raw material volumes globally are strong and very strong in South America.

Poultry volumes in the U.S. are exceedingly strong, while the downside of that is the cattle herd is really stagnant and at a 75-year low.

What's relevant about that, Tom, is that, remember, it's just like the red meat, white meat discussion here. Red meat has more fat, and so we can process more poultry and still not make as much fat as we were when we were running all the beef.

A little less fat into the discussion. As far as the modeling of guidance here, like I said, that's really March extrapolated with some improvement that's out there.

Clearly, fat prices are exceedingly much higher than they were in Q1 cash prices right now, and we're out there selling it. You'll see that flow through.

How much goes into Q2 versus Q3, we will see, but we're clearly picking up some speed there. The Rousselot business is doing quite well around the world right now.

Gelatin and collagen margins are good. Remember, 80% of that byproduct that comes out of that business is fat and protein, and so it's feeling a benefit.

We're seeing that the tariffs had their impacts on our what we're going to call our specialty proteins business, and those markets are back open again with the lower tariffs, and so we're seeing a nice improvement in protein prices. Clearly, I think the DGD bid right now today is close to 80 cents a pound.

Those are big numbers that are down there right now, and those are up anywhere from $0.20 to $0.20, $0.25 from where they were in October, November. That will start flowing through very nicely here as we get towards the end of the quarter.

Good morning and thanks for the question, and congrats on posting really strong results. Maybe just on fuel here, and DGD and really just RD.

What are your thoughts on kind of diesel prices in regards to kind of what extent you think there are structural constraints, whether infrastructure, refining capacity, or even just intermediate-term logistics that could keep diesel markets tighter for maybe longer than people were anticipating?

Sounds like a question for our partner Valero than us, but, Bob, you'll take a shot at it.

I think we're not really qualified to answer questions about diesel capacity and constraints and things like that, but I think what we can point to is just an increased cost of the raw material inputs that everyone is using to make fuel, energy products. I think what's interesting from our perspective is just how much tighter today renewable fuels are and total cost relative to conventional fuels.

Sort of what this conflict has done in terms of bridging the compliance gap in the RVO. Ultimately, I think we fully expected that we would see the margins that we're seeing today in the market, but we thought that it would perhaps take a little bit more time until compliance dates sort of forced convergence and caused that margin to occur.

This conflict and the higher energy prices underlying all of this is allowing margins in renewable fuels to sort of move to what they probably should be as a result of a strong RVO, and it's just allowing it to happen more quickly. It's also, I think, showing the world that renewable fuel is an important component of total supply, and without it today, we'd have much higher prices of conventional fuels.

Yeah. I think the other thing that Bob highlights there is, and as most of fossil diesel or conventional diesel in Scandinavia is $10 a gallon, and in the Netherlands, it's $12 a gallon, and RD is actually cheaper by almost 25% today.

The industry is going to run as hard as it can, and what's special about RD is it can be used neat or at 100%. You're going to see anybody that can produce RD running at full capacity right now.

You're also seeing a lot of other countries in the world or producers of fats and oils that can use fats and oils within their energy system, meaning the palm oil. You magically start to see palm oil disappear back into energy when the price per barrel gets to where it's at right now.

Usually, it starts when it's about $80 a barrel, and clearly there's a huge incentive right now globally to continue to move fats into energy. That's going to keep the world feedstock markets pretty constructive till things back off.

Great. Appreciate the color.

Maybe just shifting to the balance sheet, wanted to understand I know you're not guiding to DGD, but just kind of the implied step-up in EBITDA in just the overall business, I think that leverage should just come down naturally. I wanted to get a sense of how you're thinking about actively deleveraging versus allocating capital elsewhere.

This is Bob. I think we've been pretty clear in recent quarters that we're focused on paying down debt.

We've talked a lot about trying to get our debt down below $3 billion. We're still committed to that.

We do have an investor day on May 11th, and at that time, we're going to be able to talk more about what our capital plans are. I think what I'll just summarize right now is just to say that we're focused on getting that debt number down to about $3 billion.

At that point in time, that opens up a lot of potential options for Darling in terms of what we do going forward. It'll depend on what our outlook is when we get there, but we're certainly very encouraged by the EBITDA run rate that we see from the first quarter and what we're expecting for the balance of the year, and we think we'll get down to that $3 billion number relatively quickly.

At that point in time, we think the outlook is still going to be very strong.

Good morning. I actually wanted to ask a little bit of a policy question.

How EPA is proposing starting 2028 you get 50% RIN on foreign feedstock, and I'm just trying to understand whether it's positive for DAR if that goes through. Your domestic UCO and tallow would price higher.

Also, I think some of the other competitor facilities which are overly dependent on foreign feedstock might be forced to quit the business. At the same time, I think you are also importing a little bit of tallow through FASA for some of your plants.

I'm just trying to understand the puts and takes if this policy change does go through and you only get 50% RIN for foreign feedstock. Yeah.

Thanks, Manav. This is Bob.

I think to be able to answer that question, we'd also need to understand what the tariff structure is at that point in time. I think if we're looking at a 50% RIN and there are no tariffs, no origin tariffs on any of the feedstocks that we're importing, then it's going to depend on what is the demand for those feedstocks outside the United States and does the value of those international feedstocks adjust for that 50% RIN and the 45Z credit?

Ultimately, if the U.S. is the strongest market at that point in time, and international feedstocks discount themselves so they can be competitive coming into the United States, then we see all of it as a pretty big positive for Darling because it would be very supportive to our U.S.

and Canadian feedstock prices in the DAR core business, but it would also give DGD access to international feedstocks to be able to make fuels, sell those into the United States, or reexport for anywhere else. It's going to really depend on the dynamics and what's happening with fuel markets and feedstock markets outside the United States.

Overall, we don't see it as a negative.

Perfect. My second quick question on 2Q guidance and where the street is.

When we look at the street numbers, they're sitting closer to 440 in your guidance. Just to get to that guidance, street estimates versus your guidance, DGD would have to give you about $170 million.

That's roughly my calculation. Given where their margins are on DGD, it seems very possible that DGD could easily give you 170.

If you could talk a little bit about your guidance versus where the street is on 2Q, I'll be very grateful.

I think, Manav, we won't guide DGD. I think we did say we expect 300, 20 million gallons for the quarter.

We are willing to say that we think that second quarter DGD will be stronger than the first quarter. If you kind of put all that together, I think what you're saying and backing into doesn't sound unreasonable, but there isn't a lot more we can say about that in DGD's numbers.

Yeah. Manav, this is Randy, and Bob said it really well.

The DGD margin environment is constructive right now. It's still sorting its way out.

We're running at capacity. 320 is the gallon that we're going to put out there for Q2, and I suspect Q2 earnings power is greater than Q1, and Q3 will even be stronger.

Life is pretty good there right now. We've just kind of opted to kind of stay away from trying to guide because it's very very difficult because of timing, et cetera of sales and then feedstocks.

Thanks. Good morning, all, and congrats on a strong quarter.

For my first question, I wanted to start with feed. Since March, we've seen a near $0.20 per pound increase in waste FOGs, as I think you highlighted earlier, Randy.

While I understand your rendering contracts include purchase price considerations for downstream value, how should we think about the strength of waste FOG realizations flowing through to higher EBITDA from a price sensitivity perspective over the course of the year if prices remain elevated? Yeah.

I think we've kind of, Derrick, tried to address that. Clearly obviously I'm reverting back to I haven't seen April yet, to see how it's truly flowing through.

What I can tell you around the world is Europe has been truly lagging from where the U.S. run-up has happened because it's now a domestic feedstock game.

South America got impacted very hard due to the tariffs and also higher ocean freight. Why we build DGD was to own the arbitrage between animal feed and fuel.

Animal feed value today is less than $0.30 a pound, and fuel prices are north of $0.70 a pound FOB. Clearly we've made the right decision there.

What we're going to see is as we go into May and June, you will start to see a lot of that flow through. I think we're calling a bottom now in Brazil.

We've kind of figured that one out. We had to adjust our spreads.

There it's a spread management game. In Europe, much more resilient, but it's starting to move up.

I've seen South America move in the last three or four sales up 50 bucks, 100 bucks a ton from really start of April. That'll start to flow through.

That's where I would categorize the guidance that we're putting out there on the core business as potentially somewhat and very conservative right now, but till we see how it flows through, it's kind of hard to call right now. Protein prices have improved.

Rousselot, because the tariffs are down, we're having some improvement all across the line. Our biogas businesses in Europe are very strong right now.

It's really the tailwinds are building right now. Maybe we're a little gun-shy, is what I'd say right now, from the last couple years.

We'll see what they flow through here.

Perfect. Then maybe shifting over to DGD, given the higher diesel and jet crack spreads we're seeing really outside of the U.S.

but across the world, how are you viewing the international markets relative to what you can net in the U.S., and if favorable, what degree of flexibility does DGD have to further increase sales into those markets?

Thanks, Derrick. This is Bob.

DGD has always maintained a lot of flexibility and agility in terms of markets it can sell to. We have seen very attractive opportunities all around.

I think DGD has been a consistent exporter, and we expect that to continue. I think looking forward and the strength of the RVO in the U.S., it really points to a U.S.

market that should continue to increase in margins and keep barrels inside the United States. I think over time, we'll see the market create that.

It'll be market-driven, and that's what we're expecting to see.

Good morning, everyone. Thanks for taking my question, and congrats on a strong quarter, guys.

Maybe I know the focus has been on RVOs. I just want to pivot a little bit to LCFS.

Pricing has been weak. It's been trending a little higher.

Want to just get your thoughts on how you're seeing the California market evolve through the course of the year, maybe. Yeah.

Thanks, Dushyant. This is this is Bob.

LCFS, it's an interesting market. It's it's a it's a it's dynamic and hard to hard to understand quite frankly.

I think what we saw initially immediately after the RVO was, in increased amount of production and and and more sales into California. On a very short-term basis, we created some more credits there than at least at a rate that was a little bit higher than what we had.

The reality is California's only got around 3.6 billion gallons of total diesel demand. Um, 300, 400 million of that is going to be satisfied with biodiesel, and and there's probably a little bit of conventional diesel that's going to always stay there.

You're looking at kind of a 3 billion gallon demand market for renewable diesel, and the RVO essentially mandates more more production than that. If you add up all the LCFS programs in the United States, there's there's the RVO is is larger, and certainly when you include imports as well, it's larger than all those LCFS programs.

We we we do think we're going to have a lot of supply into those states, but we can't satisfy all of the requirements from the California Air Resources Board just with renewable diesel. What we expect is we're going to see LCFS credits continue to increase in value, and we'll probably see renewable diesel trading, at a discount into California because it's going to be offset by LCFS premiums.

It's it's it's a complicated one though, but it's a long way of saying we think LCFS credit premiums are are going to increase.

Got it. Thank you.

Then my follow-up, maybe just going back to the core business. Margins have been strong, and you guys gave some thoughts there.

Maybe how do we think about obviously pricing expectations are expected to be elevated, but how do we think about margins across the board, feed, food as well? How does that kind of shake out?

Maybe operationally, if there any tweaks that you guys are making, if you can talk to that.

Yeah. When, if you look across the the ingredient portfolio, kind of a little bit right to left, in the Fuel segment, non-DGD, very much an annuity business, but it's going to get a little bit of lift from the biogas business in in Europe in as we move forward through the year.

Rousselot, very much predictable, more closer to consumer-type business. Somewhere we're we're getting some tailwind there now is global collagen demand is really picking up, and you when you when you make when you do the extraction, you you make a a raw material or a feedstock, then you can make gelatin or collagen.

As you defer collar directed to the collagen pipeline, you you then take it away from the gelatin, and so ultimately we're we're seeing some improvement there because gelatin margins came under some pretty significant pressure the last couple years due to some capacity additions in South America and and China. Ultimately, we we look at that segment as as pretty stable, maybe a little bit of improvement.

Clearly, the Feed segment has the most commodity exposure. It's really just, as we say, a timing exercise right now of how the the better proteins and fats on the three big rendering continents of of North America, Europe, and and South America all start to flow through.

You'll you'll see you'll see some additional what I'm going to call margin expansion there. I I think that that's really the the thing that Bob and I feel so proud about is is the the the businesses in the rendering side are really operating at a high level of capacity and efficiency right now.

Any of the the challenges that we had in the prior years, I think are behind us now, or I believe I know they're behind us, and we're we're really starting to do do well. The only the only downside, if we look back at years when there were, commodity uplifts like this, we've got less beef in our system today than we we've had in the past, and like I said, a chicken is less fat than than red meat.

That you won't get 100% of what, if you're trying to extrapolate prior years, but it's still going to be darn good, and it should should accelerate throughout the year here.

Hey, good morning. Thanks for taking the questions.

I just wanted to follow up on the point that you were just making on kind of the internal improvements in the base business. Is there a way to kind of frame or quantify how much better your plants are running, how much more margin opportunity there is relative to the last time we saw fat prices at these levels, kind of net of what you're saying on beef versus chicken?

Thanks, Andrew. This is Bob.

I think, probably when you think about the operations of our business and you point back to 2022 and 2023 and the large acquisitions that Darling made with Valley Proteins, FASA, and Gelnex, the operations and sort of understanding how these assets all fit together are probably manifesting themselves most right now in the form of the high-quality proteins that we're making and the premiums we're able to capture because of the markets we're able to reach, whether it's high-end pet markets or high-end international markets. As those operations have come together and we understand the quality and demonstrate the consistency that we're able to produce, we're able to hit those markets more consistently.

Same is true for the Gelnex acquisition and Rousselot. This is a very complex global supply chain, and our ability now to really leverage the value of these assets by consistently meeting customer needs, moving product internationally from Brazil or wherever in the world to the Europe or the United States, we've really been able to identify what are the right origins and destinations and get maximum value out of that.

The value that you see is it's really incremental quarter-to-quarter. It's a lot of what's sort of underpinning the strong results that we've had and what we're expecting as we go forward is improvement in our own operations and coordination.

It isn't just market tailwinds.

That's helpful. Then I also wanted to ask on kind of the RIN outlook generally, and I appreciate that there's a lot of focus in the market on the near term right now.

I would just be curious to kind of get your perspective on the RIN landscape beyond '26 now that we have the RVOs, and kind of how you're thinking about comparing what the environment could look like then versus what we're seeing today, how much of a kicker that could be versus kind of where we stand today now that we have formal policy in place? Thanks.

Right now what we can see out as far as through to the end of 2027, that's the RVO that's in place. A lot of the answer to your question, it's going to depend on global prices of fuel energy, conventional energy.

It's going to depend on tariffs. It's going to depend on how well the industry performs in the United States and the amount of production and supply that we create for the market.

I'd really have to know the answers to those to answer the question about where RINs are going to go. What we do see when we look at this RVO through 2027 is that the industry needs to produce, it needs to run really hard, and even when it does, margins need to remain very strong in order to continue to incentivize all of the players to make enough product to meet that RVO.

That's the picture we see. Bottom line is RINs need to play their role in all that to be the great equalizer that creates a good renewable diesel and sustainable aviation fuel margin.

Hey, guys. Thanks for all the information.

Just a couple questions. On the food business, could you just talk about progress there with JV and then just with a larger partner for the peptide side of the business?

Then, Randy, or Bob, just on the acquisition front, you guys commented last quarter that there's some smaller acquisitions, but just use of proceeds of cash if you gives us an update there. Thanks, guys.

Yeah.

Starting with the joint venture agreement that we've signed with Tessenderlo and we're hoping to close sometime soon. I think we've been pretty clear that we're in an antitrust review process, and that's really what we need to get through before we're able to close on that deal.

Look, we've never been more excited about the potential of forming that joint venture than we are right now. We continue to see significant increase in demand for hydrolyzed collagen.

We continue to develop science and technology around the Nextida portfolio of products. What PB Leiner, the Tessenderlo business, would bring the overall Darling collagen business is added capacity that enables us to really efficiently utilize what they have and be very cost-effective in production and continue to increase sales to really feed into this strong and growing collagen market.

They also offer the opportunity to originate product and raw materials in a couple of countries where we don't have presence. It allows us to continue our growth without having to invest a lot in new capital, and which also takes time to add that capacity.

That's still going forward. We're still in this process, and we hope to conclude it sometime soon.

The proceeds that we used before that I think you're referring to is we participated in an auction to buy three rendering assets from the Patense Group in Brazil. This was a really fantastic opportunity through a Chapter 11 process for us to add assets that fit very well with the FASA network of assets that we previously acquired in 2022.

Those are the kinds of things that we really look forward to and hope will continue to arise, essentially buying assets at a discount to full value that fit very well with our network.

Good morning, everybody. Feed prices continue to run up.

Board soybean oil is in the mid-70s right now, and I guess the question is, how much more room do feed prices have to run up from here? To answer that, I think we need to know why the ramp in biodiesel utilization appears to be lagging a bit in March.

It's possible that higher pricing for physical delivery in parts of the Midwest, or cash constraints on realizing 45Z credits, or general hesitancy to restart facilities could explain it. Are you seeing any of those factors weighing on marginal biodiesel production and overall feed consumption in the market?

Yeah.

I think Bob and I can tag team this. Clearly in the Gen 1 biodiesel business, restarting those plants coming out of winter just takes a little bit of time here.

There's a seasonality of demand of that product. Trying to rebuild supply chains that have been shut down for a year and a half take a little bit of time.

I think you'll see that industry start to ramp up from where it was. Interest rates are higher, too, working capital, people forget that when you don't have that blenders tax credit, you've got to have a working capital line to run those plants.

Clearly the integrated guys, that's an easy switch for them, and you're seeing that, but the free standard takes just a little bit longer to get there would be my read on it. I don't know.

What do you think, Bob?

I think the other thing a lot of people miss on this one is for the small, independent biodiesel producer, they really don't have access to the production tax credit, practically speaking. Ultimately they can get it.

They certainly can generate the credit. They can eventually find a way to sell the credit.

It would come at a pretty big discount to $100 on the dollar. In the near term, they're not going to have access to that revenue, and so margins need to really increase from where we are today in order to incentivize all of these guys to come back online.

It's just going to take a little bit more time, but eventually that capacity is going to be valuable in our opinion because margins are going to move to levels that cause it to be.

Great. I guess relatedly, since a lot of those biodiesel producers are kind of constrained on the feed optionality side, not having pre-treaters, what's kind of the split between opportunity for veg oils, which require less pre-treating, and fats, oils, and greases that feed ingredients produces?

The entire complex should run up, but veg oils might have a chance to run up a bit more.

Yeah. Look, I think the reality is there's enough demand out there that can now utilize the veg oil feedstocks, where we're probably going to just continue to trade at sort of their CI score adjusted values.

We're not really expecting to see veg oil run up relative to the other products, just because like I said, there's enough capacity that can utilize that. The thing with biodiesel is it doesn't, as long as they can buy refined oil or it's able to pre-treat or clean the oil from that standpoint, then it doesn't need as much pre-treat capability, and biodiesel can run on 100% soybean oil.

Thanks, and good morning. Could you talk about the feedstock slate at DGD?

I know in the past you ran 100% low CI feed. Has that changed?

Are you running more soybean oil in 2026 with just some of the changing credit values around 45Z and providing more of a subsidy for veg oil based feeds? Yeah.

Thanks, Matthew. DGD is well set up to maximize opportunities depending on what is the lowest cost net of CI score feedstock and run for that barrel.

That implies that there's an increase in the utilization of veg oils into the mix. I think it's fair to say that's occurring.

It's just going to depend on these markets are they move around quite a lot. There's just going to be able to take advantage of the opportunity whichever it is.

Sounds good. Then the comments earlier I thought were pretty interesting.

You mentioned that the RVO will basically require more RD than what the West Coast LCFS markets can handle. The implication to us is that the marginal U.S.

producer will actually have to sell into non-LCFS markets, but of course the market will still need the RINs from those marginal producers. Overall, it just seems like a steepening of the cost curve and something that should continue to be pretty supportive for margins, probably likely come through in stronger RIN prices.

Is that your take as well? Do you agree?

I think that is how we see it. Ultimately, yes, I think that's how we see it.

RINs, at the end of the day, like I said earlier, RINs will need to be the great equalizer that creates the margin that we need to make enough volume to satisfy the RVO. The extent to which it needs to go is going to depend on all these other factors: feedstock costs, global fuel prices.

Certainly the environment that we're in today, it eases the burden of the RIN, but even with that, we're seeing very strong RIN values.

Thank you. Good morning.

I wanted to ask on DGD, the 2Q guidance, 320 million gallons, is that essentially you are running at maximum levels? If not, is there any reason to not run at max?

Thanks, Betty. It's close to max.

I think right now, yeah, you look at the margin environment, we are incentivized to run as hard as we can. 320 is pretty close to max.

I don't know what else there is.

Higher than slightly positive, Bob, but that is pretty close to full out.

Yeah. We're going to do our best to run full out in this environment.

Okay. Perfect.

Then I wanted to ask on kind of the differential between SAF and renewable diesel. I know in the past, SAF has had a bit of a premium over RD, but given a lot of moving pieces, including the RVO and so on, can you just speak to maybe the economics of producing SAF versus RD currently?

I think the short answer is for sales into the United States and the voluntary markets, there's more of a fixed premium to RD where SAF continues to be a better opportunity and better margin. In Europe, it is more dynamic than that.

Europe is based on mandates, and we see times when margins in Europe for RD are better than SAF. We expect that to continue to be kind of volatile or up and down.

We're really happy with the voluntary market we have in the U.S. and the premiums that we can consistently get from SAF.

Overall, we're still meeting our commitments from the investment we made in SAF at Port Arthur.

Morning. Thanks for taking my questions.

Given Darling is uniquely positioned running domestic feedstocks and then not only producing, but importing feedstocks to DGD from the international market, I was wondering if you could provide some color on if RIN prices today are sufficient enough to attract those international feedstocks to be run in the U.S. market, especially given those feedstocks no longer qualify for the producer tax credit?

Good question. The answer to that is going to depend on who's making the fuel.

For Diamond Green Diesel and, given our cost of production, the efficiency, the logistics that are available to us when it comes to importing those international feedstocks, we can make renewable diesel with those products and sell into the United States and make a good margin. I don't think everyone's able to say that.

For that reason, we do think we'll continue to see margins strengthen. We expect to see a difference in feedstock prices in North America relative to the rest of the world.

Do you expect that biodiesel producers are going to ultimately need to rely on international feedstocks as well in order for the industry to meet the RVO?

No. I think biodiesel producers should see a sufficient amount of U.S.

veg oil or U.S. and Canadian veg oil to supply their needs.

All right. Thanks, everybody, for your questions today.

As we'll be hosting Investor Day on May 11th in New York. It will be simultaneously webcast.

It's an exciting time for us as Suann, Bob, Carlos, myself, and David van Dorsselaer will lay out a lot of these topics that we discussed today in addition to what our future looks like and a three-year roadmap as we see it today. If you have any questions, follow up with Suann, and stay safe, and have a great day.

Thanks again.