Daqo New Energy Corp.

Q2 2026 revenue was $62.7 million, up from $26.7 million in Q1 2026 and down from $75.0 million in Q2 2025. Gross loss was $82.7 million versus $139.0 million in Q1 2026 and $81.4 million in Q2 2025; gross margin was negative 132% versus negative 520% and negative 108%, respectively. Net loss attributable to shareholders was $81.0 million, or $1.20 per basic ADS, compared with a net loss of $88.0 million, or $1.31 per ADS, in Q1 2026 and a loss of $76.5 million, or $1.14 per ADS, in Q2 2025. EBITDA was negative $29.0 million versus negative $83.0 million in Q1 2026 and negative $48.0 million in Q2 2025. On the operating side, production was 43,675 metric tons and sales volume was 15,190 metric tons, with average selling price at $4.04 per kilogram; total production cost was $5.95/kg and cash cost was $4.57/kg. For Q3 2026, management expects polysilicon production of approximately 40,000-45,000 metric tons, and for full-year 2026 it expects 160,000-180,000 metric tons.

The CEO’s message was that the industry is still in a weak, inventory-heavy downturn, but policy changes in China are starting to push the market toward discipline and away from below-cost selling. He emphasized that the company resumed sales in June, retains a zero-debt balance sheet, and is positioned as a low-cost, high-quality N-type polysilicon producer. He also framed AIDC power infrastructure as a second growth engine, saying Daqo is moving into that market in a disciplined way without compromising balance-sheet strength.

The CFO highlighted that the quarter improved mainly because sales volumes recovered after June, even though pricing and margins remained under pressure. He cited revenue of $62.7 million, gross loss of $82.7 million, negative gross margin of 132%, operating loss of $98.0 million, and net loss of $81.0 million; he also noted inventory impairment provisions fell to $55.7 million from $98.9 million in Q1, helping sequential gross margin improvement. On liquidity, he said Daqo had $555.0 million in cash and cash equivalents, $250.0 million in short-term investments, $71.7 million in notes receivable, $51.0 million in held-to-maturity investments, and $928.9 million in fixed-term deposits as of June 30, 2026. For cash flow, six-month operating cash use was $276.0 million, investing cash use was $159.6 million, and financing cash use was $7.8 million, mainly due to stock repurchases by Xinjiang Daqo from minority shareholders.

Analysts focused on whether government-backed self-discipline can actually support a sustainable polysilicon price floor, and when real transactions at higher prices will follow the recent rebound in forward prices. Management said the industry consensus is that selling below cost is no longer viable, that some transactions are already happening around RMB 40/kg, and that more deals should emerge over the next several months as enforcement and self-discipline take hold. On capacity exits, management said the new energy-consumption standards should force significant high-cost capacity out and that effective industry capacity is already below the built level, with more shutdowns unlikely to restart. Questions on AIDC centered on capital commitments and timing; management clarified that the total RMB 6 billion project is not fully committed, with only the first RMB 2 billion phase planned, about USD 30 million to USD 40 million expected this year, prototypes by year-end, and revenue contribution starting in 2027.