Daqo New Energy (DQ) Q1 2026 earnings summary

Executive summary

• Q1 2026 saw significant operating and net losses in the solar PV industry due to seasonal softness, high inventories, rising module costs, and overcapacity, leading to a market slowdown and reduced sales volumes.

• Geopolitical tensions and persistent industry overcapacity drove polysilicon prices below production costs, prompting a disciplined sales approach and reduced volumes.

• Maintained a robust balance sheet with zero debt and $2.0 billion in liquid assets as of March 31, 2026.

• Production exceeded guidance at 43,402 MT, but sales volume dropped to 4,482 MT as the company avoided below-cost sales.

Financial highlights

• Revenue was $26.7 million in Q1 2026, down from $221.7 million in Q4 2025 and $124 million in Q1 2025, mainly due to lower sales volume.

• Gross loss reached $139.4 million (gross margin -521.5%), impacted by a $98.4 million inventory impairment provision.

• Net loss attributable to shareholders was $88.4 million, with loss per basic ADS at $1.31.

• EBITDA (non-GAAP) was negative $83.1 million, with an EBITDA margin of -311.1%.

• Cash, short-term investments, and equivalents totaled $2.0 billion at quarter-end.

Outlook and guidance

• Q2 2026 polysilicon production expected at 35,000–40,000 MT; full-year 2026 guidance remains 140,000–170,000 MT.

• Utilization rate to be maintained at 50–55% unless price law enforcement fails, in which case further reductions are possible.

• Management expects polysilicon prices to stabilize as government anti-overcapacity measures strengthen.

• Awaiting government policy enforcement in June, which could raise minimum selling prices and impact utilization strategy.

• Cash costs expected to remain steady or trend slightly lower in coming quarters.