Daqo New Energy Q2 2026 Earnings: Revenue Misses $62.7 Million as Loss Widens; Liquidity and Sales Recovery Offer Support

Quick Verdict

Daqo New Energy reported a Q2 2026 loss of $1.20 per ADS on revenue of $62.7 million, missing consensus expectations for both metrics. The Daqo New Energy Q2 2026 Earnings release showed that revenue more than doubled sequentially as sales resumed in June, and shares reportedly rose about 6.2% in premarket trading despite pricing pressure.

About Daqo New Energy

Daqo New Energy Corp. (NYSE: DQ) is a Shanghai-headquartered, Cayman Islands-incorporated producer of high-purity polysilicon used by photovoltaic manufacturers to make solar ingots, wafers, cells and modules. Founded in 2007, the company operates polysilicon production facilities in China and reported a total nameplate polysilicon capacity of 305,000 metric tons. Its ADSs trade on the NYSE, with each ADS representing five ordinary shares.

The company’s core investment case remains tied to the global solar supply chain, particularly high-efficiency N-type polysilicon. However, Q2 results showed the severity of the current downturn: its realised polysilicon ASP was $4.04/kg, below its total production cost of $5.95/kg. Daqo nevertheless ended the quarter with zero debt and approximately $1.92 billion in aggregate cash, investments, bank notes receivable, and deposits, providing it with a substantial balance-sheet buffer.

For market-cap context, third-party market data cited a market capitalization of about $950.7 million around the earnings release. A conventional P/E ratio is not meaningful because the company remains loss-making. Daqo employed 4,749 people as of December 31, 2024, according to its latest available annual report.

Top Financial Highlights

1. Total revenue was $62.7 million, up from $26.7 million in Q1 2026 but down from $75.2 million in Q2 2025. The sequential recovery reflected a resumption of more normal sales activity in June.
2. Net loss attributable to Daqo shareholders was $81.2 million, improving from a $88.4 million loss in Q1 2026 but widening from a $76.5 million loss in Q2 2025.
3. Basic loss per ADS was $1.20, versus a loss of $1.31 in Q1 2026 and $1.14 in the prior-year quarter.
4. Adjusted loss per basic ADS was also $1.20, as the company reported no share-based compensation adjustment in the quarter.
5. Gross loss totalled $82.7 million, narrowing materially from $139.4 million in Q1 but slightly worsening from $81.4 million a year earlier.
6. Gross margin was negative 132.0%, significantly better than negative 521.5% in Q1 2026, but weaker than negative 108.3% in Q2 2025.
7. EBITDA was negative $29.3 million, compared with negative $83.1 million in Q1 2026 and negative $48.2 million in Q2 2025. EBITDA margin was negative 46.8%.
8. Operating loss was $98.1 million, narrowing from $150.8 million sequentially and $115.0 million year on year.
9. Polysilicon production reached 43,675 MT, above the company’s prior guidance range of 35,000–40,000 MT and marginally ahead of 43,402 MT in Q1.
10. Polysilicon sales volume rose sharply to 15,190 MT from 4,482 MT in Q1; however, it remained below 18,126 MT sold in Q2 2025.
11. Polysilicon ASP declined to $4.04/kg, from $5.96/kg in Q1, while total production cost remained $5.95/kg and cash cost fell slightly to $4.57/kg.
12. SG&A expense was $15.8 million, down from $32.1 million in the prior-year quarter; R&D expense was $1.6 million, mainly reflecting work on next-generation energy solutions for AI data centers.
13. Cash, cash equivalents and restricted cash were $555.3 million at June 30, 2026. Including short-term investments, notes receivable, held-to-maturity investments and fixed-term deposits, readily convertible assets totalled roughly $1.92 billion.
14. Net cash used in operating activities for the first half of 2026 was $276.2 million, compared with $105.4 million in the first half of 2025—an important signal that liquidity remains strong, but cash burn remains elevated.
15. Q3 2026 guidance calls for polysilicon production of 40,000–45,000 MT, while full-year 2026 output guidance is 160,000–180,000 MT. Daqo gave no explicit revenue, margin, or EPS guidance.

Second Quarter 2026 Financial and Operating Highlights

(Source: Sec.gov)

• The table shows that Daqo New Energy Corp. recorded improved sequential operating performance in the second quarter of 2026, although profitability remained under pressure. Revenue increased to US$62.7 million from US$26.7 million in Q1 2026, supported by a sharp recovery in polysilicon sales volume to 15,190 MT from 4,482 MT. However, revenue remained below the US$75.2 million reported in Q2 2025.
• Gross loss narrowed to US$82.7 million from US$139.4 million in the previous quarter, while gross margin improved to -132.0% from -521.5%. Net loss attributable to shareholders also decreased sequentially to US$81.2 million, compared with US$88.4 million in Q1 2026. Non-GAAP EBITDA improved to a loss of US$29.3 million, versus US$83.1 million in the preceding quarter.
• Cost efficiency showed further progress. Average polysilicon production cost was US$5.95/kg, unchanged from Q1 2026 but below US$7.26/kg in Q2 2025. Average cash cost declined to US$4.57/kg, compared with US$5.12/kg a year earlier. Overall, the results indicate a strong sequential recovery in sales volume and lower production costs, although negative margins and continued net losses show that pricing and profitability conditions remained challenging.

Cash Flow

(Source: prnewswire.com)

• The cash flow statement shows that Daqo New Energy Corp. experienced significantly higher operating cash outflows during the first six months of 2026, although lower investing outflows helped limit the overall decline in cash. Net cash used in operating activities increased to US$276.2 million from US$105.4 million in the same period of 2025, largely reflecting greater changes in operating assets and liabilities. The company also reported a net loss of US$234.0 million, compared with US$191.4 million a year earlier.
• Cash used in investing activities improved substantially, declining from US$342.7 million in 2025 to US$159.6 million in 2026. Purchases of property, plant and equipment fell to US$55.2 million from US$87.8 million, while activity related to short-term investments and fixed-term deposits also decreased considerably.
• Overall, cash, cash equivalents and restricted cash declined by US$425.0 million during the first half of 2026, slightly better than the US$439.8 million decline recorded in the prior-year period. The company’s ending cash position stood at US$555.3 million, compared with US$598.6 million at the end of June 2025. The figures indicate that lower investment spending partly offset increased operating cash pressure, although the company’s overall cash balance continued to decline

Beat or Miss?

Daqo missed the available Wall Street consensus on both revenue and earnings per ADS. The result should be interpreted alongside a major sequential improvement in sales volumes and a lower inventory-impairment charge, which reduced the quarterly gross loss even as pricing remained below cost.

Consensus figures can vary by data provider. One market-data source showed a different revenue estimate, so the comparison above uses the contemporaneous consensus cited in the earnings-reaction coverage: $114.7 million revenue and a $0.53 loss per ADS.

What Leadership Is Saying

CEO Xiang Xu framed the quarter as a sequential recovery in sales and losses, while acknowledging that weak domestic demand and high inventories continued to pressure solar value-chain pricing.

“Despite these headwinds, we resumed sales in June, delivering a sequential increase in revenue and a narrowing of our quarterly operating and net losses. Throughout this period, we continued to maintain a robust and healthy balance sheet with zero debt.” — Xiang Xu, Chairman and Chief Executive Officer.

The company also positioned AI data-center power infrastructure as a diversification opportunity beyond polysilicon, including energy-storage systems, solid-state transformers and solid-state circuit breakers that support high-voltage DC architectures.

“We are also diversifying beyond our core polysilicon business to hedge against solar PV cyclicality, targeting the fast-growing AI data center (AIDC) power infrastructure market.” — Xiang Xu, Chairman and Chief Executive Officer.

CFO Ming Yang highlighted the financial pressures behind the quarter: a below-cost polysilicon pricing environment and a gross margin that remained negative, although inventory impairment fell to $55.7 million from $98.9 million in Q1.

“Gross margin was negative 132%, compared to negative 520% in the first quarter of 2026 and negative 108% in the second quarter of 2025.” — Ming Yang, Chief Financial Officer.

Historical Performance

Daqo’s year-on-year comparison reveals a difficult earnings backdrop. Revenue fell as solar-polysilicon prices remained depressed, while losses deepened. At the expense line, SG&A fell substantially because Q2 2025 included $18.6 million in non-cash share-based compensation, making the year-on-year decline not purely operational.

Peer context

The requested “YoY comparison of competitors” cannot be presented as a like-for-like financial table from Daqo’s release because the company did not disclose Q2 2026 financial results for specific competing polysilicon producers. Publishing peer revenue, net income, or operating-expense figures without identifying the reporting entity, reporting currency, accounting basis, and fiscal-quarter alignment would risk an invalid comparison.

The industry context Daqo did provide is material: aggregate polysilicon output was 538,000 MT in the first half of 2026, down 9.8% year on year, amid low utilization, weak demand, depressed pricing and elevated inventories. Daqo said it and seven other producers signed an August 6 initiative to eliminate below-cost selling and comply with energy-consumption standards.

How the Market Reacted?

The immediate market reaction was mixed across contemporaneous reports, so it should be treated with care. One report said DQ rose 6.19% in premarket trading to $14.92 from a prior close of $14.05, with investors apparently emphasizing sequential sales recovery, declining impairment charges, substantial liquidity, and potential policy support for prices.

Another same-day report described shares as falling 14.6% after the results, underscoring that price movement may have varied by intraday measurement point, trading session, or publication timestamp. The most defensible conclusion is that investor sentiment was mixed but highly focused on the path of polysilicon pricing, cash burn, and whether Chinese supply-discipline measures can lift realised selling prices closer to or above Daqo’s cost base.

The central tension for investors is clear: Daqo has a zero-debt balance sheet and roughly $1.92 billion of liquid and near-liquid assets, but its Q2 ASP of $4.04/kg remained below the $5.95/kg total production cost. A sustainable earnings recovery therefore depends less on volume alone and more on a durable polysilicon price recovery, lower inventory impairments and disciplined industry capacity rationalisation.