Q3 2025 Darling Ingredients Inc Earnings Call

Period and instructions to ask a question will be given at that time.

Today's call is being recorded I would now like to turn the call over to Mr. Guthrie Senior Vice President of Investor Relations. Please go ahead.

Thank you and thank you for joining the Darling ingredients third quarter 2025 earnings call here with me today are Mr. Randall C Stuewe, Chairman and Chief Executive Officer, and Mr. Bob Day, Chief Financial Officer, Our third quarter 2025 earnings news release and slide presentation are available on the Investor page of our corporate web.

Right and.

It 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.

Speaker #1: Good morning and welcome to the DARLING INGREDIENTS INC. conference call to discuss the company's third quarter 2025 fiscal results . After the speakers prepared remarks , there will be a question and answer period and instructions to ask a question will be given at that time .

Speaker #1: Today's call is being recorded . I would now like to turn the call over to Miss Suann Guthrie , Senior Vice President of Investor Relations .

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.

Speaker #1: Please go ahead .

Speaker #2: Thank you . And thank you for joining the DARLING INGREDIENTS INC. third Quarter 2020 Earnings Call . Here with me today are Mr. Randall Stuewe Chairman and Chief Executive Officer and Mr. Bob day , Chief Financial Officer .

Now I will hand, the call over to Randy.

Thanks, Suzanne good morning, everyone and thanks for joining us for third quarter earnings call. Our core ingredients business delivered its strongest performance in a year and a half fueled by robust global demand and exceptional execution across all operations, while the renewables market is facing some short term uncertainty as we wait for clarity on.

Speaker #2: Our third quarter 2025 earnings news release and slide presentation are available on the investor page of our corporate website . And it will be joined by a transcript of this call once it is available .

Speaker #2: 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 .

On the renewable volume obligation, we're confident that momentum is building. We believe we're on the verge of a shift that will highlight the strength of darlings integrated model a competitive advantage that is unmatched in the industry.

Speaker #2: 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 filings with the Securities and Exchange Commission .

Our combined adjusted EBITDA for third quarter was $245 million as our global ingredients business performed strong with 248 million of EBITDA as I mentioned, the renewables business continues to be challenged as we posted a negative $3 million EBITDA for D. G D, which included a lower of cost or market.

Speaker #2: We do not undertake any duty to update any forward looking statement . Now , I will hand the call over to Randy .

Speaker #3: Hey , thanks , Sue , and good morning , everyone , and thanks for joining us for our third quarter earnings call . Our core ingredients business delivered its strongest performance in a year and a half , fueled by robust global demand and exceptional execution across all operations .

<unk> of $38 million at the entity level, Bob is going to discuss more details later in the call, but I will say that both LIFO and LCM were negative in the third quarter, which is unusual and does not typically happen for extended periods.

Speaker #3: While the renewables market is facing some short term uncertainty , as we wait for clarity on the renewable volume obligation , we're confident that momentum is building .

In addition, uncertainty and continued delays in getting a final RVO ruling had a negative impact on the overall biofuel environment in the U S. During the quarter.

Speaker #3: We believe we're on the verge of a shift that will highlight the strength of Darling's integrated model , a competitive advantage that is unmatched in the industry .

Now in our feed segment and our feed ingredients segment global rendering volumes and margins were up both sequentially and year over year, driven by strong demand for fats and proteins and solid execution by our global operations and marketing teams in the U S robust demand for domestic fabs supported by a strong.

Speaker #3: Our combined adjusted EBITDA for third quarter was 245 million . As our global ingredients business performed strong with 248 million of EBITDA , as I mentioned , the renewables business continues to be challenged .

National Agriculture, and energy policy helped boost revenue and margins elsewhere in the world, our global rendering business, particularly in Brazil, Canada, and Europe demonstrated stronger year over year performance export protein demand is showing signs of recovery was slightly firmer pricing trends emerging tariff implications.

Speaker #3: As we posted negative three million EBITDA for Dgd , which included a lower of cost or market expense of 38 million at the entity level .

Speaker #3: Bob's going to discuss more details later in the call , but I will say that both LIFO and LCM were negative in the third quarter , which is unusual and does not typically happen for extended periods in addition , uncertainty and continued delays in getting a final Rvo ruling had a negative impact on the overall biofuel environment in the US during the quarter .

It is primarily China and APAC countries, clearly have impacted our value added poultry protein products, which serve to meet the needs of global pet food and aquaculture customers.

Turning to our food segment performance remained steady quarter over quarter sales dipped slightly in the quarter as customers responded to ongoing tariff volatility, but we offset that with strong raw material sourcing and disciplined margin management. We continue to see repeat orders for our next tide of glucose control product and early studies on.

Speaker #3: Now , in our feed segment , in our feed ingredient segment , global rendering volumes and margins were up both sequentially and year over year , driven by strong demand for fats and proteins and solid execution by our global operations and marketing teams in the US .

Speaker #3: Robust demand for domestic fats , supported by a strong national agriculture and energy policy , helped boost revenue and margins elsewhere in the world .

New formulation look promising we're on track to launch our new next tide of product in the back half of 2026.

In our fuel segment, the renewables market continues to face headwinds this quarter, we saw higher feedstock cost lower rents and L CFS pricing, which ultimately impacted margins.

Speaker #3: Our global rendering business , particularly in Brazil , Canada and Europe , demonstrated stronger year over year performance . Export protein demand is showing signs of recovery with slightly firmer pricing trends emerging tariff implications primarily China and APAC countries clearly have impacted our value added poultry protein products , which serve to meet the needs of global pet food and aquaculture customers .

Scheduled turnaround of D. G D. Three led to reduced volumes of renewable diesel and sustainable aviation fuel and D. G. D. One remains idled until margins improve we believe these pressures are temporary.

As mentioned earlier, we are approaching the rollout of thoughtful public policy aimed at strengthening American agriculture, and energy leadership, a ship that we believe will significantly enhance D. G. DS earnings potential now with that I'd like to hand, the call over to Bob to take us through some financials and then I'll come back at the end and give them my thoughts for the balance of 2000.

Speaker #3: Turning to our food segment , performance remained steady . Quarter over quarter . Sales dipped slightly in the quarter as customers responded to ongoing tariff volatility , but we offset that with strong raw material sourcing and disciplined margin management .

Speaker #3: We continue to see repeat orders for our next high glucose control product . And early studies on new formulations look promising . We're on track to launch our new next high product in the back half of 2026 .

Twenty-five Bob.

Thank you Randy and good morning, everyone as Randy mentioned core business results for third quarter improved as expected while <unk> faced some challenges that will explain later in the call.

Speaker #3: Winter fuel segment . The renewables market continues to face headwinds this quarter . We saw higher feedstock costs , lower rents , and lcfs pricing , which ultimately impacted margins .

Specifically third quarter combined adjusted EBITDA was $245 million versus $237 million in third quarter, 2024, and $250 million last quarter adjusting for D. G. D. The quarter was very solid at $248 million versus $198 million in 2024 and $207 million last quarter.

Speaker #3: A scheduled turnaround of Dgd three led to reduced volumes of renewable diesel and sustainable aviation fuel and Dgd one remains idled until margins improve .

Speaker #3: We believe these pressures are temporary . As mentioned earlier , we're approaching the rollout of thoughtful public policy aimed at strengthening American agriculture and energy leadership , a shift that we believe will significantly enhance Dgd's earnings potential .

Net sales in the quarter were $1 6 billion versus $1 4 billion.

While raw material volumes remained steady at $3 8 million metric tons and gross margins improved to 24, 7% for the quarter compared to 22, 1% last year.

Speaker #3: Now , with that , I'd like to hand the call over to Bob to take us through some financials , and I'll come back at the end and give you my thoughts for the balance of 2025 .

Looking at the feed segment for the quarter EBITDA improved to $174 million from $132 million a year ago. Total sales were 1 billion versus $928 million feed raw material volumes were approximately $3 2 million tons compared to $3 1 million tonnes and gross margins relative to sales improved nicely to 24.

Speaker #3: Bob . Thank you . Randy .

Speaker #4: Good .

Speaker #3: Morning everyone . As Randy mentioned , core business results for third quarter improved as expected . While Dgd faced some challenges that .

Speaker #4: We'll explain later in the call . Specifically third quarter combined adjusted EBITDA was 245 million versus 237 million in third quarter 2024 and 250 million last quarter , adjusting for Dgd , the quarter was very solid at 248 million versus 198,000,000 in 2024 and 207 million last quarter .

3% versus 21, 5%.

In the food segment total sales for the quarter were $381 million higher than third quarter 2024 at $357 million, while gross margins for the segment were 27, 5% of sales compared to 23, 9% a year ago and raw material volumes increased to 314000 metric tons versus three.

Speaker #4: Total net sales in the quarter were 1.6 billion , versus 1.4 billion , while raw material volume remained steady at 3.8 million . Metric tons and gross margins improved to 24.7% for the quarter , compared to 22.1% last year .

<unk> hundred 6000.

EBITDA for third quarter, 2025 was up significantly compared to 2024 at $72 million versus $57 million moving.

Speaker #4: Looking at the feed segment for the quarter , EBITDA improved to 174 million from 132 million a year ago . Total sales were 1 billion versus 928 million .

Moving to the fuel segment, specifically Diamond Green diesel Darling share of D. G. D. EBITDA was negative $3 million for the quarter versus positive $39 million in the third quarter of 2024, while the environment for renewable fuels has been challenging results were further impacted by two items.

Speaker #4: Feed raw material volumes were approximately 3.2 million tons , compared to 3.1 million tons and gross margins relative to sales improved nicely to 24.3% versus 21.5% in the food segment .

First a catalyst turnaround at D. G D. Three port Arthur which included a pause in operations for approximately 30 days limited staff reduction and the higher average margins associated with that product and second end of quarter market dynamics led to negative impacts on earnings from both LIFO and LCM, which.

Speaker #4: Total sales for the quarter were 381 million , higher than third quarter 2024 , at 357 million , while gross margins for the segment were 27.5% of sales , compared to 23.9% a year ago .

In most cases would move in the opposite direction and have an offsetting impact regarding LIFO rising feedstock prices throughout the quarter and higher quarter ending values resulted in a negative impact to EBITDA, while LCM was impacted by lower heating oil in RIN values in the days after quarter end, resulting in an LCM loss of around $38 million.

Speaker #4: And raw material volumes increased to 314,000 metric tons , versus 306,000 EBITDA for third quarter 2025 was up significantly compared to 2024 , at 72 million versus 57 million .

Speaker #4: Moving to the fuel segment , specifically Diamond Green diesel Darling's share of Dgd EBITDA was -3 million for the quarter versus positive 39 million in the third quarter of 2020 .

At the entity level.

After three quarters, the combination of LIFO and LCM has resulted in a wider than normal loss that should reverse course over time.

Speaker #4: For while the environment for renewable fuels has been challenging , results were further impacted by two items . First , a catalyst turnaround at Dgd three Port Arthur , which included a pause in operations for approximately 30 days .

In addition to those two items the biofuel market in the U S has been challenged by policy delays, specifically delays in RVO enforcement dates for 2024 obligations clarity around small refinery exemptions Srs SRV reallocations in the final RVO ruling for 26 and 27%.

Speaker #4: Limited staff production and the higher average margins associated with that product . And second end of quarter market dynamics led to negative impacts on earnings from both LIFO and LCM , which in most cases would move in the opposite direction and have an offsetting impact .

However, the EPA made a supplemental proposal on September 18th that would be very constructive and.

In the first page of the appendix in the shareholder deck that we provided.

Speaker #4: Regarding Fifo , rising feedstock prices throughout the quarter and higher quarter ending values resulted in a negative impact to EBITDA , while LCM was impacted by lower heating oil and Rin values .

We've shown a picture of the 2025 RIN supply versus demand showing how these policy issues have led to an oversupply for 2025 and also showing what the balance looks like considering the epa's proposal, comparing 50% SME route reallocations in 100% Reallocations for 26 and 27 in either case.

Speaker #4: In the days after quarter end , resulting in an LCM loss of around 38 million at the entity level after three quarters , the combination of LIFO and LCM has resulted in a wider than normal loss that should reverse course over time .

A significant amount of additional U S biofuels would be needed to satisfy that RVO, suggesting higher prices for feedstocks.

Speaker #4: In addition , those two items , the biofuel market in the US has been challenged by policy delays , specifically delays in Rvo enforcement dates for 2024 , obligations , clarity around small refinery exemptions , SREs , SRE , Reallocations and the final Rvo ruling for 26 and 27 .

Foreign products and wider margins for Biofuels with.

With lower biofuel margins and late in the year timing related to receiving production tax credit PTC payments, we contributed $200 million to <unk> during the quarter.

And a total of $245 million year to date, which includes a $5 million contribution subsequent to quarter close.

Speaker #4: However , the EPA made a supplemental proposal on September 18th that would be very constructive in the first page of the appendix in the shareholder deck that we provided , we we've shown a picture of the 2025 Rins supply versus demand , showing how these policy issues have led to an oversupply for 2025 , and also showing what the balance looks like considering the EPA's proposal comparing 50% SRE , Reallocations and 100% Reallocations for 26 and 27 , in either case , a significant amount of additional US biofuels would be needed to satisfy that rvo , suggesting higher prices for feedstocks , farm products , and wider margins for biofuels with lower biofuel margins .

These contributions are offset by the $130 million dividend received in first quarter 2025, and payments from expected sales of around $250 million of PTC is that we expect to receive in the fourth quarter.

To further clarify regarding Ptc's, we expect to generate a total of around $300 million in 2025 during the third quarter. We agreed to the sale of $125 million, we anticipate an additional $125 million to $170 million of sales in the fourth quarter, and we estimate receiving payment for around 200.

Of the total $300 million, we will expect to generate by year end 2025, the balance of which we expect to monetize in early 2026. Overall, we are very pleased with how the market has developed for production tax credits.

Speaker #4: And late in the year timing related to receiving production tax credit , PTC payments we contributed $200 million to Dgd during the quarter and a total of 245 million year to date , which includes a $5 million contribution subsequent to quarter close .

<unk> robust as potential buyers have become more familiar with the details surrounding the credit.

Speaker #4: These contributions are offset by the $130 million dividend received in first quarter 2025 and payments from expected sales of around $250 million of PTC that we expect to receive in the fourth quarter .

Other fuels segment sales not including <unk> were $154 million for the quarter versus $137 million in 2024, despite lower volumes of 351000 metric tons versus 391000 metric tons, which were affected by animal disease in Europe.

Speaker #4: To further clarify regarding PTC , we expect to generate a total of around 300,000,000 in 2025 . During the third quarter , we agreed to the sale of 125 million .

Combined adjusted EBITDA for the full fuel segment was $22 million in the quarter versus $60 million in the third quarter of 2024. The difference was primarily due to lower earnings at D. J D.

Speaker #4: We anticipate an additional 125 to 170 million of sales in the fourth quarter , and we estimate receiving payment for around $200 million of the total 300 million , we will expect to generate by year end 2025 .

As of September 27th 2025, total debt net of cash was 4.01 billion versus $3 97 billion ending December 28 2024.

Speaker #4: The balance of which we expect to monetize in early 2026 . Overall , we are very pleased with how the market has developed for production tax credits .

The increase from year end is minimal.

Despite contributions made to D. G D and a $53 million earn out payment related to the <unk> acquisition from 2022.

Speaker #4: Demand is robust as potential buyers have become more familiar with the details surrounding the credit . Other fuel segment sales , not including Dgd , were 154 million for the quarter versus 137,000,000 in 2024 .

Capital expenditures totaled $90 million in the third quarter and 22 $224 million for the first nine months of 2025, we expect total debt to decrease by year end as we generate cash from the core business and receive payments from selling PTC credits.

Speaker #4: Despite lower volumes of 351,000 metric tons versus 391,000 metric tons , which were affected by animal disease in Europe , combined adjusted EBITDA for the full fuel segment was $22 million in the quarter , versus 60 million in the third quarter of 2020 .

Our bank Covenant preliminary ratio at the end of third quarter was 365 times versus 393 times at year end 2024 in.

In addition, we ended quarter three 2025 with approximately $1 7 billion available on our revolving credit facility.

Speaker #4: For the difference was primarily due to lower earnings at Dgd . As of September 27th , 2025 , total debt , net of cash , was 4.1 billion versus 3.97 billion , ending December 28th , 2024 .

The company recorded an income tax benefit of $1 2 million for the three months ended September 27, 2025, yielding an effective tax rate of minus six 3%, which differs from the federal statutory rate of 21% due primarily to recognition of revenue from the production tax credits the company paid $19 million of income taxes.

Speaker #4: The increase from year end is minimal , despite contributions made to Dgd and a $53 million earnout payment related to the Fosr acquisition from 2022 .

Speaker #4: Capital expenditures totaled 90 million . In the third quarter , and 22 224 million for the first nine months of 2025 . We expect total debt to decrease by year end as we generate cash from the core business and receive payments from selling PTC credits .

In the third quarter and $52 million year to date and expects to pay approximately $20 million more in the fourth quarter.

Overall net income was $19 4 million for the quarter or <unk> 12 per diluted share compared to net income of $16 9 million or <unk> 11 per diluted share for the third quarter of 2020 for now I will turn the call back over to Randy.

Speaker #4: Our bank covenant preliminary ratio at the end of third quarter was 3.65 times , versus 3.93 times at year end 2024 . In addition , we ended quarter three 2025 with approximately 1.17 billion available on our revolving credit facility .

Thanks, Bob I Couldnt be more excited about what's ahead for Darling ingredients in our conversations with the Trump administration. They followed through on everything they've committed to the renewable volume obligation they've drafted as thoughtful and designed to support American agriculture and energy leadership.

Speaker #4: The company recorded an income tax benefit of 1.2 million for the three months ended September 27th , 2025 , yielding an effective tax rate of minus 6.3% , which differs from the federal statutory rate of 21% due primarily to recognition of revenue from the production tax credits .

And we believe it will be a major catalyst for Diamond Green diesel the pieces are in place and we believe it's only a matter of time before darlings unmatched position in the industry becomes even more clear.

Speaker #4: The company paid 19 million of income taxes in the third quarter , and $52 million year to date , and expects to pay approximately 20 million more in the fourth quarter .

As we look ahead, we remain focused on what we can control given the current uncertainty around public policy and its impact on the fuel segment.

I will now provide financial guidance exclusively for our core ingredients business for the full year 2025, we expect the core ingredients business EBITDA, excluding <unk> to be in the range of $875 million to $900 million with that let's go ahead and open it up to questions.

Speaker #4: Overall , net income was 19.4 million for the quarter , or $0.12 per diluted share , compared to net income of 16.9 million , or $0.11 per diluted share , for the third quarter of 2024 .

Speaker #4: Now , I will turn the call back over to Randy .

Speaker #3: Hey, thanks, Bob. I couldn't be more excited about what's ahead for Darling Ingredients Inc. and our conversations with the Trump administration.

We will now begin the Q&A session.

If you would like to ask a question. Please press star followed by one or you touched on keypad.

Speaker #3: They followed through on everything they've committed to the renewable volume obligation they've drafted . Is thoughtful and designed to support American agriculture and energy leadership , and we believe it will be a major catalyst for Diamond Green diesel .

Is there any reason you would like to remove that question. Please press star followed by Tim.

Again to ask a question press star one.

Also please limit your questions to one question and one follow up.

Speaker #3: The pieces are in place and we believe it's only a matter of time before Darlene's unmatched position in the industry becomes even more clear .

As a reminder, if you are using a speakerphone. Please remember to pick up your handset before asking a question.

Policy briefly to allow questions to generate.

Speaker #3: As we look ahead , we remain focused on what we can control . Given the current uncertainty around public policy and its impact on the fuel segment , we'll now provide financial guidance exclusively for our core ingredients business for the full year 2025 .

The first question comes from the line of Thomas.

J P. Morgan. Please proceed.

Yeah.

Good morning, and thanks for the questions.

Maybe just to start out.

Speaker #3: We expect the core ingredients business EBITDA, excluding DGD, to be in the range of $875 million to $900 million. With that, let's go ahead and open it up to questions.

Gave some helpful scenario analysis for RIN balances and how that might proceed over the next couple of years and the earnings presentation.

I Wonder about what you think the most likely timeline is that we might start to get clarity on some of these outstanding regulatory items. The RVO the exemptions and then the reallocation. Thank you.

Speaker #1: We will now begin the Q&A session . If you would like to ask a question , please press star followed by one on your touch tone keypad .

Speaker #1: If for any reason you would like to remove that question , please press star followed by two . Again to ask a question , press star one .

Thanks, Tom This is Bob.

Obviously, it's a difficult question to answer.

Speaker #1: Also , please limit your questions to one question and one follow up . As a reminder , if you are using a speakerphone , please remember to pick up your handset before asking your question .

As everyone's aware the government has shut down.

At the same time, we've heard that.

The RVO is considered an essential process. We have we have people there at the EPA that are working on this so we're optimistic.

Speaker #1: We will pause here briefly to allow questions to generate . The first question comes from the line of Thomas Palmer with JP Morgan .

Based on that view and the things that we're hearing we expect sometime in the month of December.

Speaker #1: Please proceed .

Speaker #5: Good morning and thanks for the questions . Maybe just to start out , you gave some helpful scenario analysis for Rin balances and how that might proceed over the next couple of years in the earnings presentation , I wondered about what you think the most likely timeline is that we might start to get clarity on some of these outstanding regulatory items .

To have the comment period closed.

The EPA to submit to the office of management and budget their proposal and to have something approved by the end of the year.

But like I said that's it.

<unk>.

Amid a lot of a lot of things going on in that but that's our view.

Speaker #5: The rvo , the exemptions , and then the reallocation . Thank you .

Okay no. Thanks for that I know, it's a <unk>.

<unk> situation.

Speaker #4: Thanks , Tom . This is Bob . Obviously a difficult question to answer . As everyone's aware , the government has shut down at the same time , you know , we've heard that the Rvo is considered an essential process .

And then I just wanted to clarify on the feed outlook for the fourth quarter at the midpoint of the core ingredients EBITDA guidance implies.

For the three combined segments that <unk> is comparable to what we saw in <unk> at the same time. It does look like the price of waste fats and oils have dipped a bit in September so do we need prices to rebound in order for <unk> to look similar to <unk> or are there other things we should be considering as we move from <unk>.

Speaker #4: We have we have people there at the EPA that are working on this . So we're optimistic based on , you know , that view and the things that we're hearing , we expect sometime in the month of December to have the comment period closed or , you know , the EPA to submit to the Office of Management and Budget their proposal and and to have something approved by the end of the year .

Thank you.

Yes, Tom this is Randy.

75 to 900 reason, we put the range on there was exactly as you laid out we have seen given the uncertainty on policy waste fat prices come.

Speaker #4: But like I said , that's that's , you know , amid a lot of a lot of things going on . And but that's our view .

Come down a little bit here, you know most of our material in North America is going to D. G D. But remember there is still <unk>.

Speaker #5: Okay . No thanks for that . I know it's a unique situation . And then I just wanted to clarify on the feed outlook for the fourth quarter .

<unk> in Canada and prices remained strong there so ultimately.

It's kind of a it's a fairly narrow range for the business.

Speaker #5: The midpoint of the core ingredients EBITDA guidance implies for the kind of three combined segments that for Q is comparable to what we saw in three Q at the same time .

As I look around the horn non D J D.

I expect the food segment to be stronger a little bit in Q4, maybe a little consistent maybe a little on the feed segment, but I think we'll come in close to that range and hopefully we can surprise you one day and be above it.

Speaker #5: It does look like the price of waste fats and oils have dipped a bit in September . So do we need prices to rebound in order for for Q to look similar to three Q or are there other things we should be considering as we move from three Q to four Q ?

Great. Thank you.

Thank you.

Speaker #5: Thank you .

Speaker #3: Yeah . I mean , Tom , this is Randy . I mean , the 875 to 900 reason we put the range on there was exactly as you laid out , we have seen , given the uncertainty on policy waste , fat prices come down a little bit here .

The next question comes from the line of Conor Fitzpatrick with Bank of America. Please proceed.

Hi, Thank you for taking my question.

It looks like Youre, rins supply and demand table in the slides calls for significant biomass based diesel feed imports through 2027.

Speaker #3: You know , most of our material in North America is going to DGP . But remember , there's still , you know , Brazil and Canada and and prices remain strong there .

As the coastal operator, DVD may import feed and received a rins penalty on those gallons, but could you maybe walk through the benefits to <unk> policy protectionism on the feed side and maybe explain how that nets out within your U S fuel and feed businesses.

Speaker #3: So ultimately you know it's it's kind of a it's a fairly narrow range for the business . As I look around the horn non dgd , I expect the food segment to be stronger a little bit in Q4 , maybe a little consistent , maybe a little on the feed segment .

Yes.

Okay.

Yes. Thanks Conor. This is this is Bob if I if I don't answer your question directly let me know I think.

Speaker #3: But I think we'll come in close to that range . And , you know , hopefully we can surprise you one day and be above it .

The first thing I would say is it's it's still not totally clear how the EPA is going to treat.

Speaker #5: Great . Thank you .

Speaker #1: Thank you . The next question comes from the line of Connor Fitzpatrick with Bank of America . Please proceed .

Foreign feedstocks.

That's a part of this process.

As to as to whether foreign feedstocks are needed to meet the.

Speaker #6: Hi . Thank you for taking my question . It looks like your Rin supply and demand table in the slides calls for significant biomass based diesel feed imports through 2027 .

Production.

Obligations.

Its going to dependent depend on a lot of things.

We do have a lot of crop crops in crop oils in the United States and overall North America.

Speaker #6: As a coastal operator , Dgd may import , feed and receive the Rins penalty on those gallons . But could you maybe walk through the benefits to Rins policy protectionism on the feed side and maybe explain how that nets out within your US fuel and feed businesses ?

That could that could be used as feedstock for biofuels. So.

Until some of the rules around what.

What what.

If there are penalties for foreign feedstocks and how some of the crop oils are going to be treated it's really hard to answer that question.

Speaker #6: Thanks .

Speaker #4: Yeah . Thanks . Connor . This is this is Bob . If I , if I don't answer your question directly , let me know .

Speaker #4: I think you know , the first thing I would say is it's it's still not totally clear how the EPA is going to treat foreign feedstocks .

I will say that I think when you look at overall supply and demand for fats and oils in North America and you include Biofuels and food and this picture in this.

Speaker #4: That's that's a part of of this process , you know , as , as to whether foreign feedstocks are needed to meet the , the production , you know , and the obligations , it's going to depend depend on a lot of things .

Opposed to RVO from from the EPA, then probably some foreign feedstocks will be required to meet that mandate and we're just not clear yet on how how that will be accommodated.

Yeah.

Speaker #4: We do have a lot of crop crops and crop oils in the United States and overall North America . That that could that could be used as feedstock for biofuels .

Thanks, that's all I had.

Thank you.

The next question comes from the line of just shot Amani with Jefferies. Please proceed.

Speaker #4: So until some of the rules around what , you know , what what what if there are penalties for foreign feedstocks and how some of the crop oils are going to be treated , it's really hard to answer that question .

Hey, guys.

Congrats on the quarter I also wanted to note that we really appreciate the change in guidance approach.

That does help us.

My first question was on the TQ DVD margins the capsule was significantly better than expected what are some of the drivers there.

Speaker #4: I will say that I think when you look at overall supply and demand for fats and oils in North America , and you include biofuels and food , and this picture and this , you know , this proposed rvo from from the EPA , then probably some foreign feedstocks will be required to meet that mandate .

Yeah.

The third quarter capture was better or is that what you said, yes, yes for the <unk> margins and just came in better than expected.

Was it.

<unk> production or any export arb that we can think of.

Speaker #4: And , and we're just not clear yet on how how that will be accommodated .

Yes.

Yeah.

Yeah, I think so I'm not I'm.

I'm not sure I fully understand the question because the <unk> result was maybe not not is not as good as we hope then I'll help Bob here, a little bit I think Sean youre, referring to the capture that Valero reports.

Speaker #6: Thanks . That's all I had .

Speaker #1: Thank you . The next question comes from the line of Alani with Jefferies . Please proceed .

Speaker #7: Hey , guys , congrats on the quarter . I also wanted to note that we really appreciate the change in guidance approach . That does help us .

Yes, yes.

Keep in mind here this is a bit awkward.

Speaker #7: My first question was on the three Q Dgd margins . The capture was significantly better than expected . What were some of the drivers there ?

And they net they're LCM against their other segments.

So they have the same LCM, we have they just didnt put it against the renewables.

Speaker #4: In the third quarter , capture was better . Is that what you said ?

Our <unk> segment. So that's what makes the capture rate look better.

Speaker #7: Yeah , yeah . For Dgd margins , it just came in better than expected . Was it like staff production or any export ARB that we can think of ?

Yeah.

Got it Okay. That's helpful. And then maybe just staying on topic for <unk> margins.

I understand the nuance on.

And that EBIT guidance, it seems like fundamentals fundamentals are still improving nicely.

Speaker #8: This .

Speaker #4: Yeah . I think the so I'm not I'm not sure I fully understand the question . Because the dgd result was maybe not , not as not as good as we , we hoped .

Indicated margins are up again literally indicator margins seem to be off 26 quarter over quarter. What are you seeing and <unk> and how do you kind of think about that Westwood to puts and takes if you can share.

Speaker #3: I'll help Bob here a little bit . I think . Deshaun , you're referring to the capture that Valero reports . Correct ?

Yes.

This is kind of the challenge that's out there I mean clearly.

Speaker #7: Yes .

The two big units.

Speaker #3: Yes . And you know and you know keep in mind here this this is a bit awkward in that they net their LCM against their other segments .

Port Arthur and the Norco, we're going to be operating at capacity SaaS is going to be a capacity, yes. The capture indicator is stronger right now.

Speaker #3: So they had the same LCM we have . They just didn't put it against their renewables or dgd segment . So that's what makes the capture rate look better .

The challenge for Us as we thought by this time, we would have RIN values kind.

Kind of starting to reflect the restarting of the industry and they really haven't yet so it's kind of hard to I mean, we're the low cost operator.

Speaker #7: Got it . Okay . That's helpful . And then maybe just staying on topic for the for Q Dgd margins of well , we understand the nuance on removing the Dgd guidance .

We have enough feedstock to run our units our scf margins are better than classic renewable diesel and what else do you want to add Bob well I think we have seen an improvement in margins. So far in the quarter. The question is just.

Speaker #7: It seems like fundamentals of fundamentals are still improving nicely indicator margins are up again . Valero's margins seem to be up $0.36 quarter over quarter .

Are the point here is until we get clarity on.

Speaker #7: What are you seeing in for ? Q and how do you kind of think about that ? What are some of the puts and takes if you can share ?

The final ruling on the RVO for 2627, it's hard to.

Speaker #3: Yeah , I mean , this is kind of the challenge that's out there . I mean , clearly the two big units in Port Arthur and Norco are going to be operating at capacity .

It's hard to say with certainty that those margins are going to continue but thus far in the quarter, Yes, we've seen some improvement thats for sure.

Speaker #3: SAF is going to be a capacity . Yeah . The capture indicator is stronger right now . You know , the challenge for us is we thought by by this time we would have ruined values kind of starting to reflect the restarting of the industry .

Thank you.

The next question comes from the line of Manav Gupta with UBS. Please proceed.

Yeah. Good morning. My first question is we saw.

Speaker #3: And and they really haven't yet . So it's kind of hard . I mean , we're the low cost operator , you know , we we have enough feedstock to run our units , our SAF margins are better than , than classic renewable diesel .

Good improvement in your seed segment margins I think Randy over the years, you had indicated that eventually those acquisitions coming in you would be able to dime improvement than those funds. So help us understand some of the factors that help.

Speaker #3: And what else you want to add , Bob ?

Speaker #4: Well , I think we have seen an improvement in margins so far in the quarter . The question is just on the point here is , until we get clarity on the final ruling on the Rvo for 26 and 27 , it's hard to it's hard to say with certainty that that those margins are going to continue .

Help you drive improvement in the feed segment margin and also <unk>.

Earlier questions yes.

Yes, you imported feedstocks might be needed, but domestic feedstock has been priced at a higher premium because they'll get 100% green so what would be the outlook for the feed segment going into 2026, if you could talk a little bit about that.

Speaker #4: But thus far in the quarter . Yeah , we've seen some improvement , that's for sure .

Yeah, I mean, clearly as we've talked in Q1 and Q2, we used to we're building momentum we were seeing feedstock prices come off what we've seen mostly as feedstock prices are flowing through now although they've come off a little bit for Q4, but we're seeing protein prices improve around the.

Speaker #1: Thank you . The next question comes from the line of Manav Gupta with UBS . Please proceed .

Speaker #9: Yeah . Good morning . My first question is we saw a good improvement in your feed segment margins . I think , Randy , over the years you had indicated that eventually those acquisitions coming in , you would be able to drive improvement in those fronts .

The world.

I call if there's a tariff on one day tariff off one day China.

China needs to buy poultry proteins to feed Aqua culture, and whether it's China or Vietnam when the window opens they trade and so we've seen a pretty nice improvement you can look sequentially you can look year over year and in the appendix of the supplier of the shareholders that there and ultimately see.

Speaker #9: So help us understand some of the factors that drift , help you drive improvement in the feed segment margin . And also , you know , to an earlier questions , yes , you imported feedstocks might be needed , but domestic feedstocks will price at a higher premium because they'll get 100% rain .

The pricing movement, clearly fat prices were up sharply the products, we use a D J D.

Speaker #9: So what would be the outlook for the feed segment going into 2026 ? If you could talk a little bit about that ?

And but protein prices were up 10%. So I think we're going to carry on.

Speaker #3: Yeah , I mean , clearly as we've talked in , you know , Q1 and Q2 , we've used the word building momentum .

Q4 remember were always about 60 days sold ahead and so we'll carry some pretty strong prices into Q4, and I'm, hoping that as we move into next year.

Speaker #3: We were seeing feedstock prices come up . What we've seen mostly is feedstock prices are flowing through now , although they've come off a little bit for Q4 .

We will have kind of the same momentum there is always a little bit of seasonality here, but really that's kind of what I'm expecting as I look out there.

Speaker #3: But we're seeing protein prices improve around the world . You know , it's I call it there's a tariff on one day , a tariff off one day .

Speaker #3: China needs to buy poultry , proteins to . Feed aquaculture . And whether it's China or Vietnam , when the window opens , they trade .

Perfect. My quick question on the <unk> that you have created any helpful. But help me on this time here youre, assuming a flattish capacity. We know there are facilities, which are heavily dependent on Houghton feedstocks at this point of time.

Speaker #3: And so we've seen a pretty nice improvement . You can look sequentially . You can look year over year in the appendix of the supplier .

Speaker #3: The shareholders that they're and ultimately see the pricing movement clearly fat prices were up sharply . The products we use at Dgd and but protein prices were up 10% .

And they are still struggling I think they've been a struggle even more next year, if you decided to only 50% when the imported feedstocks. So is there a possibility. This imbalance will look even more attractive if some of those facilities that are heavily dependent on imported feedstock actually decided to call. It a day and shutdown.

Speaker #3: So I think we're going to carry into , you know , Q4 , remember , we're always about 60 days sold ahead . And so we'll carry some pretty strong prices into Q4 .

Speaker #3: And I'm hoping that as we move into next year , you know , we'll we'll have kind of the same momentum . There's always a little bit of seasonality here .

Yes, I think Bob and I will tag team. This my answer is we went into 2025 with a belief that the <unk> margins would be no lower than they were in 2024.

Speaker #3: But really that's kind of what I'm expecting . As I look out there .

And we were wrong.

Speaker #9: Perfect . My quick question on the table that you have created is very helpful , but help me understand here . You're assuming a flattish capacity .

And where we went wrong, what we didn't understand that the big oil guys would actually run at sub such significant losses to produce their own rooms. We believe that's changing as we come into 2026 and 2027 the losses at those plants are substantial I mean clearly.

Speaker #9: We know there are facilities which are heavily dependent on foreign feedstocks . At this point of time , and they are still struggling .

Speaker #9: I think they will struggle even more next year. If you decide to give only 50% rent to imported feedstocks, is there a possibility this rebalance would look even more attractive if some of those facilities that are heavily dependent on imported feedstock actually decided to call it a day and shut down?

Shows how efficient and operationally effective D. G. D is the RIN balance of Bob will talk about here in a minute, yes, it actually gets even more constructive if if people behave rationally.

Yeah, and I'll, just add I think you know what.

All of that is true.

Speaker #3: Yeah , I think Bob and I'll tag team this . You know , my answer is we went into 2025 with the belief that that the dgd margins would be no lower than they were in 2024 .

In addition, the proposed RVO for 26% 27 is substantially larger than 2025. So so even if we had similar production as you as you noticed from from the grid that we provided then we will ultimately have a deficit in 'twenty six 'twenty seven and what this is intending to show us specifically that and then beg the question.

Speaker #3: And we were wrong . And where were we wrong ? Well , we didn't understand that the big oil guys would actually run at some such significant losses to produce their own Rins .

<unk>, how much do margins need to improve in order for <unk>.

Speaker #3: We believe that's changing as we come into 2026 and 2027 . The losses that those plants are substantial . I mean , clearly shows how efficient and operationally effective Dgd is .

Production to increase so that we can satisfy the mandate for 'twenty six 'twenty seven.

You add a layer of complexity when you sit with the imported feedstock and if imported feedstock only generates half of Ren.

Think that some of that is going to depend on what is the origin tariff placed on that feedstock.

Speaker #3: The balance of Bob will talk about here in a minute . Yeah , it actually gets even more constructive if the if people behave rationally .

If if a feedstock if a foreign feedstock only is penalized by getting half are in.

Speaker #4: Yeah . And I'll just add , I think , you know , well all of that is true . In addition , the proposed rvo for 26 and 27 is substantially larger than 2025 .

And then not being eligible for the PTC. Then then it's it's reasonable to expect.

A decent amount of foreign feedstocks to competitively come into the United States. It would just come in at a discount to the U S feedstock.

Speaker #4: So so even if we had similar production as you , as you noticed from from the grid that we provided , then we will ultimately have a deficit in 26 and 27 .

Feedstock prices, which again is constructive to the feed business.

And our our core rendering business in the United States, but it would allow for satisfying the mandate for the RVO.

Speaker #4: And what this is intending to show is specifically that . And then beg the question , how much do margins need to improve in order for production to increase so that we can satisfy the mandate for 26 and 27 ?

But it would again it suggests that margins need to go up quite a bit and renewable diesel in order for that to happen.

Speaker #4: You know , you add a layer of complexity when you , you know , with with the imported feedstock and if imported feedstock only generates half a rin .

Thank you.

The next question comes from the line of <unk> Sharma with Stephens Inc. Please proceed.

Speaker #4: I think that some of that is going to depend on what is the origin tariff placed on that feedstock . If , if , if a feedstock if a foreign feedstock only is penalized by getting half a Rin and and then not being eligible for the PTC , then then it's it's reasonable to expect , you know , a decent amount of foreign feedstocks to competitively come into the United States .

Good morning, and thanks for the question.

I just wanted to maybe just peel into the to that last answer.

You gave there Bob I know.

In the past you have kind of walked through different RIN pricing scenarios.

Speaker #4: It would just come in at a discount to the US feedstock prices , which , again , is constructive to the feed business .

And there are.

A little moving pieces here, just with our foreign feedstocks will get counted but just as it stands now no PTC half of Rins for the foreign feedstocks are you able to quantify like what range remains should be at in order for the industry to run to meet the mandate in 2020.

Speaker #4: And our , you know , our core rendering business in the United States . But it would allow for satisfying the the mandate for the Rvo .

Speaker #4: But it would again , it suggests that margins need to go up quite a bit in renewable diesel in order for that to happen .

Six.

Okay.

So this is going to be somewhat of a swag here because like you said there are a lot of moving pieces and if we assume that.

Speaker #1: Thank you . The next question comes from the line of pooran Strama with Stephen , Inc. . Please proceed .

There is.

We have access to our origin feedstocks that don't face a significant tariff and the primary source of the penalty is the half rent and lack of access to a PTC then we probably need rents to go up.

Speaker #10: Good morning and thanks for the question . I just wanted to maybe just just peel into the to that last answer you gave there .

Speaker #10: Bob, I know in the past you have kind of walked through different RIN pricing scenarios, and there are a lot of moving pieces here just with how foreign feedstocks will get counted.

<unk> 40 or so.

In order to incentivize.

Enough production to satisfy the mandate for 2006, if the SRA reallocation is only 50%.

Speaker #10: But just as it stands now , no PTC , half a Rin for the foreign feedstocks . Are you able to quantify like what range Rins should be at in order for the industry to run to meet the mandate in 2026 ?

Great Great I appreciate that.

My follow up I, just kind of wanted to focus on the balance sheet more specifically.

Your debt and leverage I wanted to revisit what your plans are.

Speaker #4: So, this is going to be somewhat of a swag here because, like you said, there are a lot of moving pieces.

To pay off debt and also wanted to ask.

What are your restrictions like what what leverage ratios do your your your debt restrictions covenants start kicking in at.

Speaker #4: And you know , if we assume that there's , you know , there's we have access to or origin feedstocks that don't face a significant tariff and the primary source of the penalty is the half rin and lack of access to a PTC .

We were nowhere near.

Breaking any any covenants.

Speaker #4: Then we probably need RINs to go up $0.40 or so in order to incentivize, you know, enough production to satisfy the mandate for 26.

I think we've said before we're committed to paying down debt, we've got a lot of headroom in our revolver.

Due to the circumstances around receiving cash payments from selling.

Speaker #4: If the SRA reallocation is only 50% .

Production tax credits.

We will we will be receiving more cash in the fourth quarter and we didn't receive any cash from production tax credits in the third quarter.

Speaker #10: Great , great . Appreciate that . My follow up . I just kind of wanted to focus on the balance sheet more specifically , you know , your debt and leverage .

And so by the end of the year, we expect our debt coverage ratio. As you know is it is viewed by the banks to be right around three times.

Speaker #10: I wanted to revisit what your plans are to to pay off debt and also wanted to ask , what are your restrictions like ?

So that's that's really that's our position on that and long term horizon.

Speaker #10: What ? What leverage ratios do your your your debt restrictions ? The covenants start kicking in at .

We've got a financial policy agreed in the board room to go down to two five times it doesn't take much for the restart of <unk> two to start to do that.

Speaker #4: We we we're we're nowhere near , you know , breaking any any covenants . You know , I think we've said before we're we're committed to paying down debt .

We've not been in a capital deprivation of starvation mode of any of the factories globally.

No.

We're in good shape here to continue to build this thing out and grow and Delever at the same time.

Speaker #4: We've got a lot of headroom in our revolver due to circumstances around receiving cash payments from selling production tax credits . You know , we we will we will be receiving more cash in the fourth quarter .

Yeah.

Thank you.

The next question comes from the line of Ryan Todd with Piper Sandler. Please proceed.

Speaker #4: And we and we didn't receive any cash from production tax credits in the third quarter . And so by the end of the year , you know , we expect our debt coverage ratio , as you know , as it's viewed by the banks to be right around three times .

Okay.

Great. Thanks.

Sorry, I know you talked a lot about this but maybe.

One more follow up on some of the regulatory uncertainty.

Speaker #4: So that's that's really that's our position on that .

Speaker #3: And and long term we're we've got a financial policy agreed in the board room to go down to two and a half times .

As we wait for the final RVO I mean, you've talked about the.

Uncertainty around reallocation in a couple of other things.

Speaker #3: It doesn't take much for the restart of Dgd to , to start to do that . We've not been in a capital deprivation or starvation mode of any of the factories globally .

What are some of the other topics that you think are still.

Being being kicked around.

Is there is there a possibility of any change in the.

Speaker #3: So , you know , we're we're in good shape here to continue to to build this thing out and grow and delever at the same time .

<unk> approach to import of.

Foreign Biofuels.

Are they still you know.

Is there still consideration in terms of the treatment of domestic feedstocks in terms of carbon intensity.

Speaker #1: Thank you . The next question comes from the line of Brian Todd with Piper Sandler . Please proceed .

Like land use penalties and stuff like that.

What are some of the potential.

Risks.

Or or or positive things that you think could come out of.

Speaker #11: Good . Thanks . Sorry , I know you talked a lot about this , but maybe one more follow up on on some of the regulatory uncertainty .

The final ruling there outside of just kind of the high level RVO and the.

And the reallocation.

Speaker #11: I mean , the as we wait for the for the final Rvo , I mean , you've talked about the uncertainty around reallocation and a couple of other things .

Well I think Brian this is Randy and Bob and I'll kind of tag. It again here, if I leave anything out I mean, clearly American agriculture.

Speaker #11: What are what are some of the other topics that you think are still being being kicked around ? Is there is there a possibility of any change in the approach to import of of foreign biofuels ?

Is that the forefront of the discussions.

In DC right now.

Clearly when you lose your largest customer for soybeans and when you get in beef prices as high as they are you have got a lot of people in the room that have ideas on how to fix the situation and so what we have been part of his many of these discussions is what's the easy.

Speaker #11: Are they still , you know , is there still consideration in terms of the treatment of domestic feedstocks , in terms of carbon intensity , like land use penalties and stuff like that ?

Speaker #11: And what are some of the potential risks or , you know , or or positive things that you think could come out of the final ruling there outside of just , you know , kind of the high level rvo and the and the reallocation .

The easy button here is a large spo.

The RVO with a 100% reallocation now if you go back and you look really the EPA gave you a multiple choice test, it's either 50% or 100%, but if you really inclines you can you can talk about something else you'd like.

Speaker #3: Well , I think , Brian , this is Randy and Bob and all kind of tag it again here . If I leave anything out , I mean , clearly American agriculture is at the forefront of the discussions in DC right now .

And so they've set the table there clearly the PTC out there is doesn't encourage foreign feedstocks. So.

That's a block in itself with a tariff on top of that even makes it more difficult. We've had discussions in D C and we said well.

Speaker #3: You know , clearly when when you lose your largest customer for soybeans , when you get beef prices as high as they are , you've got a lot of people in the room that have ideas on how to fix the situation .

The easy button is that just remember if you don't allow foreign feedstocks in here because they can't generate a credit and then oh by the way where are those feedstocks going to go in the room go silent.

Speaker #3: And so what we've been part of is many of these discussions is what's the easy button ? The easy button here is a large SVO or Rvo with a 100% reallocation .

They finally got it they realize those stocks are going to go back to other processors.

Can probably name who they are around the world in Singapore and Rotterdam in portable, Finland, and then Theyre going to move finished Rd on top of us and thats destructive to what they're trying to accomplish so they're trying to figure out right now how to manage that under the tariff codes. So you've got the U S.

Speaker #3: Now , if you go back and you look really the EPA gave you a multiple choice test , it said either 50% or 100% .

Speaker #3: But if you're really inclined, you can you.

Trade along with the EPA collaborating trying to figure out how to put this together to accomplish the needs that are going to produce energy and be constructive to the U S farm community.

Yeah, and I'll, just I'll just add that as we sit here today. The EPA has already proposed to 50%.

RIN Gen generated for our foreign biofuel no access to PTC, so that in and of itself makes it more difficult, but as Randy said Theres a lot of momentum too to preventing foreign biofuels to come in and participate in U S. A.

U S support programs. So we're pretty confident that that's that's going to work out well as it relates to feedstocks that that is another another thing that we're waiting for clarity on whether theyre going to enforce the 50% rent concept.

Or if were.

Foreign feedstocks are simply going to be limited by origin tariffs.

Yeah.

Okay.

And then maybe just.

You talked about you provided a little bit of clarity around PTC monetization you've had a couple of years.

A couple of quarters into the experience of our a few quarter than in the experience of production out of the PTC regime.

Youre getting more consistency can you talk about how the monetization market seems to be working there have the discount has been fairly stable.

And how should we think about the general rate ability of the process at this point is the one.

$125 million this quarter, a $150 million at the midpoint next quarter is that like a.

Or are you in a fairly ratable place now in terms of monetizing the majority of their production.

Yes, I think so I think the context here is that.

There were two things that made it difficult earlier in the year to sell production tax credits one is that.

Not not many counterparties were familiar with the credit itself. So there is lots of questions.

The value of the credit is determined in part by carbon intensity. So you can just imagine for industry is looking to buy tax credits that arent familiar with with our biofuel industry are trying to understand all of that is not an easy an easy thing.

And then and then the other is that most companies.

It was pretty cloudy what their tax liabilities were going to look like at the end of 2012 25, because of the big beautiful Bill and a lot of things that went on around that so early in the year. It was it was difficult to get a lot of traction.

That's obviously changed significantly both of those pictures are a lot more clear and so yeah, I think that for US we're confident in our ability to sell.

A majority of the credits that will generate in 2025, and then it should be a pretty ratable process through 2026.

Yes, I think its one last piece to that is I would characterize the environment news. There is more interested parties now than they were earlier in the year. So it's now getting a chance to define terms refine terms and pick the counterparty that we wanted to do with timing respected to window received the cash.

Cash.

It's a very constructive environment now.

Thank you.

The next question comes from the line of Derrick Whitfield with Texas Capital. Please proceed.

Good morning, all and thanks for taking my questions.

Regarding guidance I appreciate the position you guys are taking with the more volatile DVD business segment.

With that said, we are seeing better spot margins in for Q4, remote feedstocks and specifically for tableau and yellow grease.

Majority of the credits that will generate in 2025, and then it should be a pretty ratable process through 2026.

Would it be fair to highlight the DVD could pose the best quarter in 2025 at current margins.

Yeah, I think it's one last piece to that is I would characterize the environment news. There is more interested parties now than they were earlier in the year. So it's now getting a chance to define terms refine terms and pick the counterparty that we want to do with timing perspective to window received.

Again will be a positive element as you enter 2026.

Yes, Thanks Derik.

I think that would be fair.

I think one of the things we're sensitive to is just.

So uncertain.

Policy has been and the impact that that's had on margins.

The cash so it's a very constructive environment now.

I mean look we're very optimistic about improvement in the fourth quarter and the outlook for next year, but.

Thank you.

The next question comes from the line of Derrick Whitfield with Texas Capital. Please proceed.

We realize that the market at large really wants to see proof of that before you know before estimates.

Good morning, all and thanks for taking my questions.

Believing a lot of what what estimates are out there. So I think that we are encouraged by what we've seen so far in the quarter and we think the outlook is good but we're just hesitant to.

Regarding guidance I appreciate the position you guys are taking with the more volatile DVD business segment.

That said, we are seeing better spot margins in <unk> for most feedstocks and specifically for tableau and yellow grease.

To define that with a lot of precision just given the lack of <unk>.

Would it be fair to highlight the DVD could pose the best quarter in 2025 at current margins.

Clarity around policy that we're still we're still facing Bob can you comment on what it takes to trigger ran and obligations and when that would happen.

Which again will be a positive element as you enter 2026.

So with the enforcement dates and that yeah. I mean, I think one thing that has caused a real delay and the reaction of the RIN has been.

Yeah. Thanks Derrick.

I think that would be fair.

I think one of the things we're sensitive to is just how uncertain.

The movement of the 2024 enforcement date for March 31 to December one.

Policy has been and the impact that that's had on margins.

I mean look we're very optimistic about improvement in the fourth quarter and the outlook for next year, but.

Until we get the final ruling on the 26 and 27 RVO and clarification as to when the 2025 enforcement date is going to be it's it's difficult for obligated parties to feel that they are incentivized to go and buy all their rents, especially when.

We realize that the market at large really wants to see proof of that before you know before estimates.

Believing a lot of what what estimates are out there. So I think that we are encouraged by what we've seen so far in the quarter and we we think the outlook is good but we're just hesitant to.

So many.

Small refinery exemptions were granted.

For the small refineries out there that are wondering whether they should buy rens.

To define that with a lot of precision just given the lack of.

They have an incentive to wait when the obligation date is set at a later time in the event that they get an exemption.

Clarity around policy that we're still we're still facing can you comment on what it what it takes to trigger rune and obligations and when that would happen.

And so.

Randy is alluding to is it until some of those things or clarify, which we do think is going to happen around the end of the year.

So with the enforcement dates and that yeah. I mean, I think one thing that has caused a real delay and the reaction of the RIN has been.

But until those things are clarified the incentive to buy rins and tighten up the rent S. N D doesn't exist the way that it's intended and so it's just it gets a little bit difficult to forecast, but we you know to your point Derek we have seen an improvement in margins so far in the quarter the outlook is better.

The movement of the 'twenty 'twenty four enforcement date for March 31 to December one.

Until we get the final ruling on the 26 and 27 RVO and clarification as to when the 2025 enforcement date is going to be it's it's difficult for obligated parties to feel that they are incentivized to go and buy all their rents, especially when.

We're very optimistic domestic about 2026.

Alright, understood and as my follow up we've seen the RV market in Europe strengthened in recent months.

So many.

Small refinery exemptions were granted.

As you guys work through the complex math of spreads shipping and tariffs.

For the small refineries out there that are wondering whether they should buy rens.

What extent could you access this market if it remains robust.

They have an incentive to wait when the obligation date is set at a later time in the event that they get an exemption.

We can access that market, but we pay a duty to access that market. So.

And so.

And that duty can fluctuate a bit but it's it's a it's typically over a dollar a gallon so.

Randy is alluding to is until some of those things are clarified which we do think is going to happen around the end of the year.

We are selling consistently to that market or diamond Green is.

But until those things are clarified the incentive to buy rins and tighten up the rent S. N D doesn't exist the way that it is intended and so it's just it gets a little bit difficult to forecast, but we to your point Derek we have seen an improvement in margins so far in the quarter the outlook is better.

But it just it's we're looking at it as a net of duties and comparing that to other markets we have available.

Thank you.

We're very optimistic domestic about 2026.

The next question comes from the line of Matthew Blair with Tpa. Please proceed.

Okay understood and as my follow up we've seen the RV market in Europe strengthened in recent months.

Thank you and good morning, I was hoping you could talk a little bit about the feedstock mix D. J D.

As you guys work through the complex math of spreads shipping and tariffs to what extent could you access this market if it remains robust.

I know that you're always looking to optimize and some of it is commercially sensitive, but just on a big picture basis. It looks like some of the indicator margins for Rd made from vegetable oil are trending a little bit better than Rd made from both VIP. So.

We can access that market, but we pay a duty to access that market. So.

And that duty can fluctuate a bit but it's it's it's typically over a dollar a gallon so.

Just overall DTD shifted to more of a bedroom all mix or is it still pretty much all most of the IP. Thank you.

We are selling consistently to that market or diamond Green is.

But it just it's we're looking at it as a net of duties and comparing that to other markets we have available.

Yeah. Thanks Matthew.

This is Bob so.

D G D hasnt materially shifted its mix.

As I think Youre aware D. G D. One is still down.

Thank you.

If D. G D. One were to go back up and run and that mix would shift more towards.

The next question comes from the line of Matthew Blair with T. P. H. Please proceed.

Towards the soybean oil.

But as we sit here today the mix hasn't changed a lot. Our best margins are on you go and yellow grease and animal fats and so we're going to maximize the opportunity we have to use those products.

Thank you and good morning, I was hoping you could talk a little bit about the feedstock mix.

And I know that you're always looking to optimize and some of it is commercially sensitive, but just on a big picture basis. It looks like some of the indicator margins for our D made from vegetable oil are trending a little bit better than Rd made from both VIP. So.

Yeah, the only thing that I would add Matthew is that clearly in Q1 and Q2 as we were trying to figure out the rules around the PTC and 45 C.

Re domesticating, our supply chain was it was a pretty poor.

Just overall PGD shifted to more perpetual all mix or is it still pretty much all most of the IP. Thank you.

Significant challenge D. J D as heavily reliant now on borrowings Yuko and darlings, yellow grease and animal fat supply and so we've got that up and running full speed now and it's really visible now you can see it in the earnings of our core ingredients business and ultimately it'll it'll translate into a better.

Yeah. Thanks Matthew.

This is Bob so.

D G D hasnt materially shifted its mix.

As I think Youre aware D. G D. One is still down.

Sales value within D. G D.

D. G D. One were to go back up and run then that mix would shift more towards soybean oil.

Yeah.

Thank you that's helpful and then I apologize if I missed this but the contributions that Darling is making into D. G D.

But as we sit here today the mix hasn't changed a lot our best margins are on newco, and yellow grease and animal fats and so we're going to maximize the opportunity we have to use those products.

Is that going to help fund the DCD, three turnaround or YY as Darling, sending money back to D. G D.

Yes, the only thing that I would add Matthew is is that clearly in Q1 and Q2 as we were trying to figure out the rules around the PTC and 45 C.

Yes.

So the answer to that question.

Some of Thats timing some of that is Oh.

Turnaround some of Thats just the margin structure. So remember that the PTC revenue that we will get as Darling that flows directly to the partners. So that money doesn't stay inside of Diamond Green diesel that's number one the other is as you pointed out in 2025, we've completed three catalysts turnarounds and.

Re domesticating, our supply chain was it was a pretty poor.

Pretty significant challenge D. G. D is heavily reliant now on darlings, Yuko and darlings, yellow grease and animal fat supply and so we've got that up and running full speed now and it's really visible now you can see it in the earnings of our core ingredients business and ultimately it'll it'll translate into a better.

And so our maintenance Capex is higher in 2025% of normal.

So it's really the timing of all of those things.

Sales value within D G.

That's led to the contributions that we've made.

Thank you that's helpful and then apologies if I missed this but the contributions that Darling is making into D. G D. Ah.

Thank you.

The next question comes from the line of Jason <unk> with TD Securities. Please proceed.

Is that going to help fund these.

<unk> three turnaround or.

Why is darling, sending money back to D. G D.

Yeah, Hey, good morning, Thanks for taking my questions.

Yes. It is.

So the answer to that question.

I wanted to go back to something else that Bob had mentioned just around.

Some of Thats timing some of that is as turnaround. Some of that is just the margin structure. So remember that the PTC revenue that we will get as Darling that flows directly to the partners. So that money doesn't stay inside of the Diamond Green diesel that's number one.

<unk> companies.

Complying with their rent obligations in that.

Perhaps catalyzing stronger RIN prices.

Can you talk about I guess more specifically the timeline around that I think 2020 for rens are due December 1st and then at that time the balances for 2025 should.

The other is as you pointed out in 2025, we've completed three catalysts turnarounds and so our maintenance Capex is higher in 2025 than normal.

Should become more visible to the market so.

So it's really the timing of all those things.

Do you expect that December 1st deadline to hold in and do you think that could be an initial catalyst to move prices higher before we get the final RVO for 2006 and 'twenty seven.

That's led to the contributions that we've made.

Thank you.

The next question comes from the line of Jason gentlemen, with TD Securities. Please proceed.

Yeah, Thanks, Jason so.

I do think that that deadline will hold I don't know that it will have much of an impact on RIN prices because.

Yeah, Hey, good morning, Thanks for taking my questions.

The rins that have been procured so far in 2025 can ultimately be used to satisfy the obligation for 2024 and thats quite a long time and a lot of runs there may be some.

I wanted to go back to something else that Bob had mentioned just around.

Companies.

Complying with their rent obligations and in that.

Perhaps catalyzing stronger RIN prices.

Refiners, who are waiting until the last moment to buy their runs but because we've had so much time in 2025 to do that we're not expecting that that's going to result in a significant lift to RIN prices at that time, if we have clarity around enforcement dates for 2025 going back to the March 31, 2026 as they do.

Can you talk about I guess more specifically the timeline around that I think 2020 for rens are due December 1st and then at that time the balances for 2025 should.

Should become more visible to the market so.

Emily would be.

Do you expect that to summer first deadline to hold and do you think that could be an initial catalyst to move prices higher.

That would be a time, when we would expect RIN values to to probably see a lift.

Before we get the final RVO for 2006 and 'twenty seven.

Got it that's helpful. And then my second one is hopefully a simpler question just given.

Yeah, Thanks, Jason so.

I do think that that deadline will hold I don't know that it will have much of an impact on RIN prices because.

On the screen <unk> margins have improved it seems like.

It could be.

The margins are going to it could be there to restart D. J D. One so I'm wondering what exactly you need to see to have confidence to restart D. J D. One thanks.

All the Rins that have been procured so far in 2025 Ah can ultimately be used to satisfy the obligation for 2024, and thats quite a long time and a lot of rens there may be some.

So we've talked about this before.

Refiners, who are waiting until the last moment to buy their rents, but because we've had so much time in 2025 to do that we're not expecting that that's going to result in a significant lift to RIN prices at that time, if we have clarity around enforcement dates for 2025 going back to the March 31 2026.

D. J D. One went down for a catalyst turnaround early in 2025.

Given the changes in the PTC and and the origin tariffs on so many of the feedstocks. Our view is that D. G. D. One only makes sense to restart at least in the current environment with the current RVO under the current rules.

Normally would be that.

That would be a time when we would expect RIN values two to probably see a lift.

When soybean oil can be profitable and profitable means a margin that's good enough for a long enough outlook.

Got it that's helpful. And then my second one is hopefully a simpler question just given.

That justifies burning up a catalyst and so I think certainly we're a lot closer to that than we have been.

On the screen DDG margins have improved it seems like it.

It could be.

We may we may get there, but it's definitely looks a lot better than it did.

That the margin could be there to restart D. J D. One so I'm wondering what exactly you need to see to have confidence to restart D. J D. One thanks.

A few months ago.

Thank you.

Okay.

The next question comes from the line of Andrew <unk> with BMO. Please proceed.

So we've talked about this before D. J D. One went down for a catalyst turnaround early in 2025.

Hey, guys. This is Ben on for Andrew.

Given the changes in the PTC and and the origin tariffs on so many of the feedstocks. Our view is that D. G. D. One only makes sense to restart at least in the current environment with the current RVO under the current rules.

My first question is around the food segment and just the commentary there that pointed to maybe some weakness exiting third quarter and into fourth quarter. So I was just hoping you could on.

When soybean oil can be profitable and profitable means a margin that's good enough for a long enough outlook.

Just walk us through your outlook for the next few months in the food segment.

Yes, I think what we were trying to put in the narrative is clearly tariff on tariff or up to 50.

That justifies burning up a catalyst.

So I think certainly we're a lot closer to that than we have been.

Fenton all tariffs trying to figure out you know the supply chain was very confusing for our customers in Q3.

<unk>.

We may we may get there, but it's definitely looks a lot better than it did.

A few months ago.

And so the choice was to pull down domestic inventories you remember most of our Brazilian production comes into the U S.

Thank you.

The next question comes from the line of Andrew Scott said with BMO. Please proceed.

And that's in the hydrolyzed collagen peptide form very successful product for us and so we had some delays in orders there. We think it will pick up and build a stronger Q4 thats about all the color that I can give you today on it and what we've seen is a continued rebound of the hydrolyzed collagen business.

Hey, guys. This is Dan on for Andrew.

My first question is around the food segment and just the commentary there that pointed to maybe some weakness exiting third quarter and in the fourth quarter. So I was just hoping you could on <unk>.

And while our new next hydro products are making a foothold in the industry. There is still relatively minor and the contribution of that segment, but they are.

Just walk us through your outlook for the next few months in the food segment.

Yes, I think what we were trying to put in the narrative is clearly tariff on tariff or up to 50, you know fentanyl tariffs trying to figure out you know the supply chain was very confusing for our customers in Q3.

<unk> is as we quoted in there we're getting repeat orders, which is a great thing.

By next summer.

We're going to launch what I think will be called next hydro brain.

That'll be a brain health product and it's got a really great outlook too soon.

And so the choice was to pull down domestic inventories you remember most of our Brazilian production comes into the U S.

Well, that's great to hear.

And then on my neck question, something that kind of I think in Boston that we some times or at least lately.

And the hydrolyzed collagen peptide form very successful product for us and so we had some delays in orders there. We think it will pick up and build a stronger Q4 thats about all the color that I can give you today on it and what we've seen is a continued rebound of the hydrolyzed collagen business and while our new next.

<unk> credit value had been generally.

<unk>.

Weak levels.

Can you remind us of the expected timeline triggers that should propel these values higher eventually.

Type of products are making a foothold in the industry. There is still relatively minor in the in the contribution of that segment, but they are as as we quoted in there we're getting repeat orders, which is a great thing.

Yeah. Thanks, Andrew This is Bob.

I think as we all know that there was.

Quite a bit of a delay in the implementation of their stepped down to to increase the greenhouse gas obligation reduction obligation in California and so.

By next summer.

We're going to launch what I think will be called next Hydra brain and that'll be a brain health product and it's got a really great outlook too so.

As a result of that that bank got built up so large that.

Most of the obligated parties from our perspective.

Had a sufficient number of credits where they even with the change in the ruling they didn't need to go out and immediately by credits.

Well, that's great to hear.

John.

And then my next question something that kind of I think it Boston, we'd sometimes at least lately.

Our view is that they are they are working their way through those credits.

And that sometime in 2026, we will start to see that F&D come more into balance and steady increases in the L. CFS credit premium but.

California, <unk> credit value.

<unk> been generally stable.

Table at weak levels.

Can you remind us of the expected timeline triggers that should propel these values higher eventually.

It's hard to I think we believe it'll be more steady than than sort of a step up in value.

Yeah. Thanks, Andrew This is Bob.

I think as as we all know that there was quite a bit of a delay in the implementation of their step down.

Thank you.

The next question comes from the line of Heather Jones with Heather Jones Research. Please proceed.

To increase between us guess obligations reduction obligate, California and so.

Hi, good morning, Thanks for the question.

As a result of that bank got built up so large that.

I Wonder is it I had a question on your feed segment and just thinking about the protein pricing.

Most of the obligated parties from our perspective.

Sure.

I had a sufficient number of credits where they even with the change in the ruling they didn't need to go out and immediately by credits.

So in the past that you had put in place some of your some of your thoughts pricing contracts.

Our view is that they are they are working their way through those credits.

Like minimum levels and if it went below that.

And in that sometime in 2026, we will start to see that F&B come more into balance and steady increases in the L. CFS credit premium but.

Darling received wouldn't goes along with that and I was just wondering.

If you all have put any in any of those kind of things in place for your protein business in the U S.

It's hard to it I think we believe it'll be more steady than than sort of a step up in value.

Okay.

Yeah. This is Bob so.

All of our.

You know every contract is somewhat unique and it really has to do with.

Thank you.

Yeah.

Approach towards accommodating our suppliers and trying to work with them on terms that makes sense for their business.

The next question comes from the line of Heather Jones with Heather Jones Research. Please proceed.

As you I think what you're pointing out is that we do have some contracts where darling collect some minimum processing fee.

Good morning, Thanks for the question.

I Wonder is it I had a question on your feed segment and just thinking about the protein pricing.

And if prices get above a certain threshold then we participate in some of the value of those prices. There are certain instances where protein prices are part of that as fat prices are.

I know in the past that.

You had put in place some of your some of your thoughts pricing contracts.

I think generally speaking, though we see.

Had like minimum levels and if it went below that.

As you are well aware, we see a lot more volatility in fat prices and a lot more upside from time to time in fat prices.

But darling received wouldn't go to one of that and I was just wondering.

And so we tend to focus more on that than we do on the volatility in the protein markets. Yes, I think the augment what Bob said is.

If you all have put any in any of those kind of things in place for your protein business in the U S.

The thing that happened is the United States was heavily reliant on shipping low ash poultry meal into the Asia countries predominantly China for Aqua culture, the offset was a strong domestic pet food demand in the U S.

Okay.

Yeah. This is Bob so are all of our.

You know every contract is somewhat unique and it really has to do with.

Our approach towards accommodating our suppliers and trying to work with them on terms that makes sense for their business.

And what we've seen two fold is one with the tariffs on Tarasoff with China and Vietnam.

As you I think what youre pointing out is that we do have some contracts, where darling collect some minimum processing fee and if prices get above a certain threshold then we participate in some of the value of those prices. There are certain instances where protein prices are part of that is as fat prices are.

They are unable to take the risk if you will to buy that product. So it has defined as all commodities do the next best market, what youre seeing in the pet food businesses post Covid, you've taken fluffy back to the other shelter and then youre not seeing a growth that is very significant right now on the pet food side.

I think generally speaking, though we see.

As youre well aware, we see a lot more volatility in fat prices and a lot more upside from time to time in fat prices and so we tend to focus more on that than we do on the volatility in the protein markets. Yes, I think the augment what Bob said is the thing that happened is the United States was heavily reliant on shipping low ash coal.

And then youre seeing that the consumer the CPG companies took prices up pretty drastically making those bags.

Our brand name products with need and I'm really really pricey and you're watching strong growth now in the green based alternatives, namely all ROI. So it's essentially a disruption scenario right now Heather.

<unk> meal into the Asia countries predominantly China for Aqua culture, the offset was a strong domestic pet food demand in the U S.

We're off from where traditionally poultry high and low ash poultry products are traded although they are coming back the second the Trump relieve the tariff on Vietnam for 30 days or whatever Biggs Biggs shipments and sales went out a year, that's our eastern seaboard plants that are heavily reliant on.

And what we've seen two fold is one with the tariffs on Tarasoff with China and Vietnam.

They are unable to take the risk if you will to buy that product. So it has defined as all commodities do the next best market, what youre seeing in the pet food businesses post Covid, you've taken fluffy back through the shelter.

Those products. So I think we've got a pretty good outlook they've come back now and have improved.

Quarter over quarter, and I think we are.

And then youre not seeing a growth that's very significant right now on the pet food side, and then youre seeing that the consumer the CPG companies took prices up pretty drastically making those bags.

We're cautious on next year, but we think it's a we think everything looks much better.

Okay. Thank you for that and then my follow up is on Europe. So recently, they extended the tariffs on R&D endpoints and biodiesel enforced extended the SaaS, so as you're thinking about Q4.

Brand name products with need and I'm really really pricey and you're watching strong growth now in the green based alternatives, namely all ROI. So it's essentially a disruption scenario right now Heather.

You'll have a full quarter of production.

We're off from where traditionally poultry high and low ash poultry products are traded although they are coming back the second.

<unk>.

SaaS pricing in Europe is really strong so.

Well, having a fourth full quarter of production.

The Trump relieve the tariff on Vietnam for 30 days or whatever Biggs Biggs shipments and sales went out of here thats, our eastern seaboard plants that are heavily reliant on those products. So I think we've got a pretty good outlook they've come back now.

More than offset the impact of them now until anything these tariffs on U S. SaaS and just wondering how to think about those moving pieces.

Yes, Thanks, Heather I think the way to look at look think about that is.

Improved.

Quarter over quarter, and I think we are.

It will have but if it is going to have an impact the impact is going to be felt a bit later on.

We're cautious on next year, but we think it's a we think everything looks much better.

Staff is not we aren't selling SaaS in a spot market.

Okay. Thank you for that and then my follow up is on Europe. So recently, they extended the tariffs on Rd endpoints and biodiesel enforced extended SaaS.

The SaaS that we're producing today was sold a while ago.

Most of the SaaS that we will produce in 2026 is already sold so.

The tariff impacts will affect new contracts as they come about and we'll just have to see what those markets look like in supply and demand, but we still have we still have access to voluntary markets of the United States.

So as we're thinking about Q4.

You'll have a full quarter of SaaS production.

And.

SaaS pricing in Europe is really strong so.

Well, having a fourth.

So we're optimistic about where we stand with SaaS and soft sales.

Full quarter production.

More than offset the impact of them now until everything these tariffs on U S.

Thank you.

SaaS and just wondering how to think about those moving pieces.

The next question comes from the line of <unk> Zhang with Scotiabank. Please proceed.

Yes, Thanks, Heather I think the way to look at look think about that is.

Thank you and good morning, Thanks for taking my question.

It will have but if it's going to have an impact the impact is going to be felt a bit later on.

My first question I wanted to ask about broadly.

Staff is not we aren't selling SaaS in a spot market.

Broadly the core EBITDA guidance.

<unk> that we're producing today was sold a while ago.

It's been updated to the 875 to 900 rooms.

Most of the SaaS that we will produce in 2026 is already sold so.

And that's a bit lower versus the first number that you gave out.

The end of the year. So I'm wondering if you could reflect on how the year played out.

The tariff impacts will affect new contracts as they come about and we'll just have to see what those markets look like in supply and demand, but we still have we still have access to voluntary markets the United States.

Where it didn't quite meet your earlier expectations and then looking forward to 2026.

Do you think that this year's total to 13% growth is somewhat.

So we're optimistic about where we stand with SaaS and SaaS sales.

Comparable to what you're seeing for next year.

Thank you.

Yes, Betty this is Randy I mean, the 875 to 900 is the amalgamation of all three segments net of D. G D.

The next question comes from the line of <unk> with Scotiabank. Please proceed.

Thank you and good morning, Thanks for taking my question.

Clearly.

Sure.

Two thirds of the way through October we don't know really where October is going to finish we don't have that type of visibility on a day to day basis here. So.

My first question I wanted to ask of the.

Broadly the core EBITDA guidance.

It's just that this business when prices are steady.

It's been updated to the 875 to 900 rooms.

And volumes were steady around the world you can give some guidance there what what we have tried to do is it's just too difficult to put a number out on D. G D.

And that's a bit lower versus the first number that you gave.

The end of the year.

Wondering if you could reflect on how the year played out.

And where it didn't quite meet your earlier expectations and then looking forward to 2026.

Either for Q4.

Next year, the core ingredients right now looks similar to stronger in 2026, but we won't know that and be able to give guidance on that until around tolling. RVO is published and then when we do our probably our February earnings call.

Do you think that this year's total to 13% growth is somewhat.

Comparable to what you're seeing for for next year.

Yes, Betty this is Randy I mean, the 875 to 900 is the amalgamation of all three segments net of D. G D <unk>.

Okay fair enough.

And my follow up question I wanted to ask about the fuel ingredients business.

Clearly.

Two thirds of the way through October we don't know really where October is going to finish we don't have that type of visibility on a day to day basis here. So.

Question on excluding DTD.

On the margin there looked a bit the gross margin looked a bit higher quarter over quarter and also the segment earnings.

It's just this business when prices are steady.

And volumes were steady around the world you can give some guidance there what what we have tried to do is it's just too difficult to put a number out on D. G D.

<unk> came in higher versus what we saw in the first half.

Could you please share maybe some of the drivers there.

Yes that business is made up while Bob described in his comments a disease, it's really mortality destruction predominantly in Europe today, and that's our green gas business reminding people that.

Either for Q4 or next year, the core ingredients right now looks similar to stronger in 2026, but we won't know that and be able to give guidance on that until around tolling. RVO is published and then when we do our probably our February earnings call.

The green gas or Green certification business in Europe, or the one of the largest in all of Europe today producing gas.

Over there and those are our digester businesses and we added a small one in Poland. Now. So you know ultimately that business ebbs and flows with what we call the <unk> business predominantly and that service the seven rendering plants in Europe that are geared towards mortality destruction.

Okay fair enough.

And my follow up question I wanted to ask about the fuel ingredients business.

Person on excluding DTD.

On the margin there looked a bit.

Anything you want to add there Bob.

Gross margin looked a bit higher quarter over quarter and also the segment earnings.

I mean I think it's.

What youre alluding to it's just sometimes the inputs the price the cost will change for the inputs energy prices in the were selling there remains strong in and so thats, what youre seeing with these gross margins.

<unk> came in higher versus what we saw in the first half.

Could you please share maybe some of the drivers there.

Yes that business is made up while Bob described in his comments a disease, it's really mortality destruction predominantly in Europe today, and that's our green gas business reminding people that.

Okay.

Thank you.

There are no additional questions at this time I will.

The green gas or Green certification business in Europe, or the one of the largest in all of Europe today producing gas.

I'll hand, it back to the management team for any further or closing remarks.

Hey, Thank you again for all the questions.

Over there and those are our digester businesses and we added a small one in Poland now so.

As always if you have additional questions feel free to reach out to Suzanne and stay safe have a great holiday season, and we look forward to talking to you. After the first of the year.

Ultimately that business ebbs and flows with what we call the <unk> business predominantly and that service the seven rendering plants in Europe that are geared towards mortality destruction.

That concludes today's conference call. Thank you you may now disconnect your lines.

Anything you want to add there Bob.

I mean I think it's.

What youre alluding to it's just sometimes the inputs the price the costs will change for the inputs energy prices in the were selling there remains strong in and so thats, what youre seeing with these gross margins.

Yeah.

Thank you.

There are no additional questions at this time.

I will hand, it back to the management team for any further or closing remarks.

Hey, Thank you again for all the questions today.

As always if you have additional questions feel free to reach out to Suzanne as they say have a great holiday season, and we look forward to talking to you. After the first of the year.

That concludes today's conference call. Thank you you may now disconnect your lines.