Darling Ingredients (DAR) is down sharply in Thursday trading as the market digests the company’s first-quarter 2026 earnings release. The pullback looks driven by profit-taking and a higher bar for results after the stock’s strong run, even though the quarter showed a meaningful rebound in profitability and cash generation.

For Q1 2026 (quarter ended April 4, 2026), Darling reported net income of $134.3 million, or $0.83 per diluted share, versus a net loss of $26.2 million in the year-ago quarter. Total net sales rose to about $1.6 billion (company-reported $1.55 billion) and combined adjusted EBITDA more than doubled to $406.8 million. Management also said it monetized $45.0 million of Production Tax Credit sales during the quarter and ended the period with $116.0 million of cash and $1.1 billion of revolver availability, with a preliminary leverage ratio of 3.17x and total debt of $4.1 billion.

A key driver of the earnings rebound was Diamond Green Diesel (DGD). For the three months ended March 31, 2026, DGD sold 272.4 million gallons of renewable fuels at an average EBITDA of $1.11 per gallon, and the quarter included a favorable LCM inventory valuation adjustment of roughly $48.4 million attributable to Darling. Darling’s share of DGD adjusted EBITDA surged to $151.2 million from $6.0 million in the prior-year quarter—an acceleration that underscores improving renewable fuel economics, but also keeps investor focus on how durable those margins are through the year given commodity and policy sensitivity.

The next catalyst is the company’s outlook for the core ingredients business and any incremental color from management on renewable fuel margins. For Q2 2026, Darling guided to core ingredients adjusted EBITDA of approximately $260–$275 million, setting a near-term performance marker that traders will compare against feedstock costs, renewable diesel/SAF margins, and any policy/tax-credit developments that influence DGD profitability.