Daqo New Energy Announces Unaudited Third Quarter 2026 Financial Results

SHANGHAI, Oct. 27, 2026 /PRNewswire/ -- Daqo New Energy Corp. (NYSE: DQ) ("Daqo New Energy," the "Company" or "we"), a leading manufacturer of high-purity polysilicon for the global solar PV industry, today announced its unaudited financial results for the third quarter ended September 30, 2026.

Third Quarter 2026 Financial and Operating Highlights

• Aggregate of cash, short-term investments, bank notes receivable, held-to-maturity investments and fixed-term bank deposit balance was $2.06 billion at the end of Q3 2026, compared to $1.92 billion at the end of Q2 2026
• Polysilicon production volume was 53,469 MT in Q3 2026, compared to 43,675 MT in Q2 2026
• Polysilicon sales volume was 46,910 MT in Q3 2026, compared to 15,190 MT in Q2 2026
• Polysilicon average total production cost⁽¹⁾ was $5.37/kg in Q3 2026, compared to $5.95/kg in Q2 2026
• Polysilicon average cash cost⁽¹⁾ was $4.23/kg in Q3 2026, compared to $4.57/kg in Q2 2026
• Polysilicon average selling price (ASP) was $4.12/kg in Q3 2026, compared to $4.04/kg in Q2 2026
• Revenue was $194.2 million in Q3 2026, compared to $62.7 million in Q2 2026
• Gross loss was $60.6 million in Q3 2026, compared to $82.7 million in Q2 2026; gross margin was negative 31.2% in Q3 2026, compared to negative 132.0% in Q2 2026
• Net loss attributable to Daqo New Energy Corp. shareholders was $52.9 million in Q3 2026, compared to $81.2 million in Q2 2026; loss per basic American Depositary Share (ADS)⁽³⁾ was $0.78 in Q3 2026, compared to $1.20 in Q2 2026
• Adjusted net loss (non-GAAP)⁽²⁾ attributable to Daqo New Energy Corp. shareholders was $52.9 million in Q3 2026, compared to $81.2 million in Q2 2026
• Adjusted loss per basic ADS⁽³⁾ (non-GAAP)⁽²⁾ was $0.78 in Q3 2026, compared to $1.20 in Q2 2026; EBITDA (non-GAAP)⁽²⁾ was negative $9.2 million in Q3 2026, compared to negative $29.3 million in Q2 2026; EBITDA margin (non-GAAP)⁽²⁾ was negative 4.7% in Q3 2026, compared to negative 46.8% in Q2 2026

Management Remarks

Mr. Xiang Xu, CEO of Daqo New Energy, commented, "Supported by continued anti-involution policies, including price enforcement, the polysilicon sector bottomed out and rebounded in Q3, with polysilicon prices gradually recovering towards cost levels. However, downstream players continued to hold polysilicon inventories and largely limited their purchases to immediate operational needs, keeping overall sector trading volumes low. Against this backdrop, we delivered a substantial increase in Q3 shipment volumes, driving strong sequential revenue growth and narrowing losses. Our financial position remained sound, with a robust balance sheet and zero debt throughout the period. As of September 30, 2026, we held cash, cash equivalents and restricted cash of $546.5 million, short-term investments of $267.3 million, bank notes receivable of $161.5 million, held-to-maturity investments of $51.6 million, and a fixed term bank deposit balance of $1.0 billion. Together, these readily convertible assets totaled $2.06 billion, up from $1.92 billion at the end of Q2, providing a strong financial foundation and strategic flexibility to navigate the current market environment."

"Operationally, our nameplate capacity utilization rate was approximately 70% during the period. Total production volume at our two polysilicon facilities was 53,469 MT, exceeding our guidance range of 40,000 MT to 45,000 MT. Sales volume rose sharply from 15,190 MT in Q2 to 46,910 MT in Q3, following our shift in June from a wait-and-see stance to a more market-oriented sales and pricing strategy. We believe this increase also reflects greater customer confidence in our product quality and continued preference for our products. Our average selling price increased by 2.0% sequentially to $4.12/kg, although the increase lagged the broader market recovery because Q3 shipments fulfilled orders signed before late July. On the cost side, average total production cost and average cash cost fell by 9.7% and 7.4% sequentially, respectively, reaching new record lows of $5.37/kg and $4.23/kg, respectively, reflecting our continued improvements in manufacturing efficiency and cost control."

"In light of the current market dynamics, we expect total polysilicon production volume in Q4 2026 to be approximately 35,000 MT to 45,000 MT. For the full year of 2026, we expect production volume to be in the range of 175,000 MT to 185,000 MT."

"Anti-involution efforts across the solar PV sector continued during Q3. The State Administration for Market Regulation (SAMR) released price compliance guidance targeting the solar PV sector on July 31, followed in August by an industry initiative against below-cost sales that we co-signed. Against this backdrop, polysilicon manufacturers halted below-cost sales, and N-type polysilicon prices rebounded from a trough of RMB 30.5-33/kg in Q2 to approximately RMB 40-43/kg by the end of Q3. On September 3, the National Development and Reform Commission (NDRC) and the SAMR jointly issued the Notice on Matters Concerning Cost Accounting for Low-Price Disordered Competition in Key Industrial Products, establishing a firmer regulatory basis for polysilicon pricing. Despite these policy tailwinds, elevated industry inventories and weak near-term demand continue to make the operating environment challenging. In response, we are taking a disciplined approach and evaluating a reduction in our near-term utilization rate to better align our production with market demand and support the orderly destocking of polysilicon inventories. This approach is consistent with our commitment to the long-term, healthy development of the solar industry."

"We are also diversifying beyond our core polysilicon business to reduce our exposure to solar PV cyclicality by targeting the fast-growing AI data center (AIDC) power infrastructure market. On June 3, 2026, we announced an investment agreement to establish a manufacturing base for the R&D, manufacturing, and sale of next-generation energy solutions and related equipment for AIDCs, including energy storage systems, solid-state transformers, and solid-state circuit breakers. These technologies support the AIDC industry's transition to high-voltage direct current architecture, such as the 800V DC standard advanced by Nvidia and other leading AI infrastructure providers. The platform is anchored by Daqo Group, an affiliated entity under common beneficial ownership with Daqo New Energy Corp., which brings over 40 years of power equipment manufacturing expertise, established technology, experienced talent, and deep customer relationships to help accelerate our entry into this segment. We view AIDC power infrastructure as a structural growth opportunity that complements our core business and has the potential to broaden our earnings base. Drawing on our track record of navigating multiple polysilicon cycles, we intend to pursue this expansion in a disciplined manner while preserving our balance sheet strength."

"Despite the challenging market environment, the solar PV industry retains compelling long-term growth prospects. Growing vulnerabilities in global energy markets have heightened concerns about national energy security, underscoring the important role that solar PV and other renewable energy sources can play. As one of the world's lowest-cost producers of high-quality N-type polysilicon, supported by a robust balance sheet and zero debt, we remain optimistic about the sector and are well positioned to capitalize on the anticipated broader market recovery and long-term growth opportunities. We will continue to sharpen our competitive edge by advancing high-efficiency N-type technology and using digital transformation and AI adoption to optimize costs. As the world accelerates its transition to clean energy, we are confident in our ability to play a leading role in that transition."

Outlook and guidance

The Company expects to produce approximately 35,000 MT to 45,000 MT of polysilicon during the fourth quarter of 2026. The Company expects to produce approximately 175,000 MT to 185,000 MT of polysilicon for the full year of 2026, inclusive of the impact of the Company's annual facility maintenance.

This outlook reflects Daqo New Energy's current and preliminary view as of the date of this press release and is subject to change. The Company's ability to achieve these projections is subject to risks and uncertainties. See "Safe Harbor Statement" at the end of this press release.

Third Quarter 2026 Results

Revenues

Revenues were $194.2 million, compared to $62.7 million in the second quarter of 2026 and $244.6 million in the third quarter of 2025. The sequential increase was primarily driven by higher sales volumes, as the Company resumed normal sales activities in June following its adoption of a more market-oriented sales and pricing strategy.

Gross (loss) profit

Gross loss was $60.6 million, compared to a gross loss of $82.7 million in the second quarter of 2026 and a gross profit of $9.7 million in the third quarter of 2025. Gross margin was negative 31.2%, compared to negative 132.0% in the second quarter of 2026 and positive 3.9% in the third quarter of 2025. The sequential improvement in gross margin reflected higher selling prices, lower production costs and lower inventory impairment provisions. Inventory impairment provisions totaled $30.9 million in the third quarter of 2026, down from $55.7 million in the second quarter of 2026.

Selling, general and administrative expenses

Selling, general and administrative (SG&A) expenses were $16.3 million, compared to $15.8 million in the second quarter of 2026 and $32.3 million in the third quarter of 2025. The sequential increase was primarily attributable to higher sales volume. The year-over-year decrease was primarily because the Company recognized $18.6 million in non-cash share-based compensation related to its share incentive plans in the third quarter of 2025, while it did not have this item in the same period 2026.

Research and development expenses

Research and development (R&D) expenses were $2.7 million, compared to $1.6 million in the second quarter of 2026 and $0.6 million in the third quarter of 2025. The increase was primarily due to R&D of next-generation energy solutions for AIDCs. R&D expenses can vary from period to period and reflect R&D activities that take place during the quarter.

Loss from operations and operating margin

As a result of the foregoing, loss from operations was $78.6 million, compared to $98.1 million in the second quarter of 2026 and $20.3 million in the third quarter of 2025.

Operating margin was negative 40.5%, compared to negative 156.5% in the second quarter of 2026 and negative 8.3% in the third quarter of 2025.

Net loss attributable to Daqo New Energy Corp. shareholders and loss per ADS

As a result of the foregoing, net loss attributable to Daqo New Energy Corp. shareholders was $52.9 million, compared to $81.2 million in the second quarter of 2026 and $14.9 million in the third quarter of 2025.

Loss per basic ADS was $0.78, compared to $1.20 in the second quarter of 2026 and $0.22 in the third quarter of 2025.

Adjusted net (loss) profit (non-GAAP) attributable to Daqo New Energy Corp. shareholders and adjusted (loss) earnings per ADS (non-GAAP)

Adjusted net loss (non-GAAP) attributable to Daqo New Energy Corp. shareholders, excluding non-cash share-based compensation costs, was $52.9 million, compared to adjusted net loss (non-GAAP) attributable to Daqo New Energy Corp. shareholders of $81.2 million in the second quarter of 2026 and adjusted net profit (non-GAAP) attributable to Daqo New Energy Corp. shareholders of $3.7 million in the third quarter of 2025.

Adjusted loss per basic ADS was $0.78, compared to adjusted loss per basic ADS of $1.20 in the second quarter of 2026 and adjusted earnings per basic ADS of $0.05 in the third quarter of 2025.

EBITDA

EBITDA (non-GAAP) was negative $9.2 million, compared to negative $29.3 million in the second quarter of 2026 and $45.8 million in the third quarter of 2025. EBITDA margin (non-GAAP) was negative 4.7%, compared to negative 46.8% in the second quarter of 2026 and 18.7% in the third quarter of 2025.

Financial Condition

As of September 30, 2026, the Company had $546.5 million in cash, cash equivalents and restricted cash, compared to $555.3 million as of June 30, 2026 and $551.6 million as of September 30, 2025. Short-term investments were $267.3 million, compared to $250.0 million as of June 30, 2026 and $431.3 million as of September 30, 2025. Notes receivable, representing bank notes maturing within six months, were $161.5 million, compared to $71.7 million as of June 30, 2026 and $157.0 million as of September 30, 2025. Held-to-maturity investments were $51.6 million, compared to $51.0 million as of June 30, 2026 and nil as of September 30, 2025. Fixed term deposit due within one year was $964.9 million, compared to $928.9 million as of June 30, 2026 and $1,034.5 million as of September 30, 2025.

Cash Flows

For the nine months ended September 30, 2026, net cash used in operating activities was $215.0 million, compared to $50.0 million in the same period of 2025.

For the nine months ended September 30, 2026, net cash used in investing activities was $235.4 million, compared to $448.9 million in the same period of 2025. The net cash used in investing activities in 2026 was primarily attributable to the purchase of short-term investments and fixed term deposits, net of redemptions, as well as purchases of property, plant and equipment.

For the nine months ended September 30, 2026, net cash used in financing activities was $7.8 million, compared to $32.0 thousand in the same period of 2025. The net cash used in financing activities in 2026 was primarily related to $7.8 million in share repurchases made by the Company's subsidiary, Xinjiang Daqo, from its minority shareholders.

Use of Non-GAAP Financial Measures

To supplement Daqo New Energy's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("US GAAP"), the Company uses certain non-GAAP financial measures that are adjusted for certain items from the most directly comparable GAAP measures including earnings before interest, taxes, depreciation and amortization ("EBITDA") and EBITDA margin; adjusted net (loss)/profit attributable to Daqo New Energy Corp. shareholders and adjusted (loss)/earnings per basic and diluted ADS. Our management believes that each of these non-GAAP measures is useful to investors, enabling them to better assess changes in key elements of the Company's results of operations across different reporting periods on a consistent basis, independent of certain items as described below. Thus, our management believes that, used in conjunction with US GAAP financial measures, these non-GAAP financial measures provide investors with meaningful supplemental information to assess the Company's operating results in a manner that is focused on its ongoing, core operating performance. Our management uses these non-GAAP measures internally to assess the business, its financial performance, current and historical results, as well as for strategic decision-making and forecasting future results. Given our management's use of these non-GAAP measures, the Company believes these measures are important to investors in understanding the Company's operating results as seen through the eyes of our management. These non-GAAP measures are not prepared in accordance with US GAAP or intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with US GAAP; the non-GAAP measures should be reviewed together with the US GAAP measures, and may be different from non-GAAP measures used by other companies.

The Company uses EBITDA, which represents earnings before interest, taxes, depreciation and amortization, and EBITDA margin, which represents the proportion of EBITDA in revenues. Adjusted net (loss)/profit attributable to Daqo New Energy Corp. shareholders and adjusted earnings per basic and diluted ADS exclude costs related to share-based compensation. Share-based compensation is a non-cash expense that varies from period to period. As a result, our management excludes this item from our internal operating forecasts and models. Our management believes that this adjustment for share-based compensation provides investors with a basis to measure the Company's core performance, including compared with the performance of other companies, without the period-to-period variability created by share-based compensation.

A reconciliation of non-GAAP financial measures to comparable US GAAP measures is presented later in this document.

Conference Call

The Company will hold a conference call to discuss the financial results at 8:00 AM U.S. Eastern Time on Tuesday, October 27, 2026 (8:00 PM Beijing / Hong Kong time on the same day).

Dial-in details for the earnings conference call are as follows:

Participant dial in (U.S./Canada toll free): +1-888-346-8982

Participant international dial in: +1-412-902-4272

Chinese Mainland toll free: 4001-201203

Please dial in 10 minutes before the call is scheduled to begin and ask to join the Daqo New Energy call.

Webcast link:
https://app.webinar.net/Wn3ENJxzB8q

A replay of the call will be available 1 hour after the conclusion of the conference call through November 3, 2026. Dial in details for the replay are as follows:

U.S./Canada toll free: +1-855-669-9658

International toll: +1-412-317-0088

Replay access code: 2856109

To access the replay through an international dial-in number, please visit the link below.

https://services.choruscall.com/ccforms/replay.html

Participants will be asked to provide their name and company name upon joining the call.

About Daqo New Energy Corp.
Daqo New Energy Corp. (NYSE: DQ) ("Daqo" or the "Company") is a leading manufacturer of high-purity polysilicon for the global solar PV industry. Founded in 2007, the Company manufactures and sells high-purity polysilicon to photovoltaic product manufacturers, who further process the polysilicon into ingots, wafers, cells and modules for solar power solutions. The Company has a total polysilicon nameplate capacity of 305,000 metric tons and is one of the world's lowest cost producers of high-purity polysilicon.

Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "guidance" and similar statements. Among other things, the outlook for the fourth quarter and the full year of 2026 and quotations from management in these announcements, as well as Daqo New Energy's strategic and operational plans, contain forward-looking statements. The Company may also make written or oral forward-looking statements in its reports filed or furnished to the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, all of which are difficult or impossible to predict accurately and many of which are beyond the Company's control. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the demand for photovoltaic products and the development of photovoltaic technologies; global supply and demand for polysilicon; alternative technologies in cell manufacturing; the Company's ability to significantly expand its polysilicon production capacity and output; the reduction in or elimination of government subsidies and economic incentives for solar energy applications; the Company's ability to lower its production costs; and changes in political and regulatory environment. Further information regarding these and other risks is included in the reports or documents the Company has filed with, or furnished to, the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date hereof, and the Company undertakes no duty to update such information or any forward-looking statement, except as required under applicable law.

Daqo New Energy Corp.
Unaudited Condensed Consolidated Statements of Operations
(US dollars in thousands, except ADS and per ADS data)

Daqo New Energy Corp.
Unaudited Condensed Consolidated Balance Sheets
(US dollars in thousands)

Daqo New Energy Corp.
Unaudited Condensed Consolidated Statements of Cash Flows 
(US dollars in thousands)

Daqo New Energy Corp.
Reconciliation of non-GAAP financial measures to comparable US GAAP measures
(US dollars in thousands)

SOURCE Daqo New Energy Corp.