Daqo New Energy Corp.

Q1 2026 revenue was $26.7 million, down from $221.7 million in Q4 2025 and $124.0 million in Q1 2025. Gross loss was $139.4 million versus gross profit of $15.4 million in Q4 2025 and gross loss of $81.5 million a year ago; gross margin was negative 521% versus 7% and negative 65.8%, respectively. Net loss attributable to Daqo shareholders was $88.4 million, or $1.31 per basic ADS, compared with $7.3 million and $0.11 in Q4 2025 and $71.8 million and $1.07 in Q1 2025. The company ended March 31, 2026 with $559.4 million in cash, cash equivalents and restricted cash, $288.3 million in short-term investments, $50.3 million in held-to-maturity investments, and $1.1 billion in fixed-term bank deposits; it said total cash-convertible assets were about $2 billion and debt was zero. For Q2 2026, management guided polysilicon production to 35,000 to 40,000 metric tons, and for full-year 2026 it guided 140,000 to 170,000 metric tons.

The CEO, through remarks delivered by management and later in Q&A, framed the quarter as a deliberate response to a severely weak pricing environment rather than a demand capture problem. He said the company is maintaining or could reduce utilization depending on whether policy support and price-law enforcement materialize, and emphasized that Daqo believes it is well positioned if industry consolidation and higher minimum pricing emerge. The tone was cautious but opportunistic: near-term operating flexibility is being preserved while waiting for a policy reset.

The CFO said Q1 revenue declined sharply because the company reduced sales in response to low prices, and gross margin turned deeply negative mainly due to a $98.4 million inventory impairment provision. He highlighted SG&A of $12.2 million, R&D of $0.8 million, operating loss of $150.8 million, and EBITDA of negative $83.0 million. On liquidity, he pointed to $559.4 million in cash, $288.0 million in short-term investments, $20.8 million in notes receivable, $50.3 million in held-to-maturity investments, and $1.0 billion in fixed-term deposits as of March 31, 2026. Cash used in operating activities was $147.5 million, investing cash outflow was $275.8 million, and financing cash outflow was $7.8 million, mainly from share repurchases by a subsidiary.

Analysts focused on whether government anti-involution and price-law measures could actually improve pricing and trigger industry consolidation. Management said authorities are reworking a common cost model, expects new price guidance around June or midyear, and described possible enforcement as ranging from penalties to license revocation or electricity shutdowns, though nothing had happened yet. On utilization and pricing, management said Daqo would keep utilization around 50% to 55% if prices are supported above cost, but would lower utilization and sell closer to market if policy support does not materialize. Management also said Q2 demand is looking better than Q1, downstream inventories are coming down, and cash cost should be roughly in line with Q2 and trend slightly lower later in the year.