Daqo New Energy ((DQ)) has held its Q3 earnings call. Read on for the main highlights of the call.
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In the latest earnings call, Daqo New Energy showcased a positive shift in its financial performance, marked by substantial revenue growth and improved EBITDA. Despite ongoing challenges such as industry overcapacity and net losses, the company’s robust financial standing and strategic initiatives offer a promising outlook for future performance.
Significant Revenue Growth
Daqo New Energy reported a remarkable increase in revenues, climbing to $244.6 million in Q3 2025 from $75.2 million in Q2 2025. This growth was fueled by higher sales volumes and an increase in the average selling price, signaling a strong demand for the company’s products.
Positive EBITDA and Gross Margin
The company achieved a positive EBITDA of $45.8 million, with an EBITDA margin of 18.7%. Gross profit also saw an upswing, reaching $9.7 million with a gross margin of 3.9%, a significant improvement from previous quarters’ negative margins.
Record Low Production Costs
Daqo New Energy achieved record low production costs, with a 12% decrease to $6.38 per kilogram in Q3 2025. Cash costs also dropped by 11% to $4.54 per kilogram, marking the lowest in the company’s history and enhancing its competitive edge.
Increased Sales Volume
The sales volume surged to 42,406 metric tons, up from 18,126 metric tons in the previous quarter. This increase helped in reducing inventory levels and demonstrated the company’s ability to meet rising market demand.
Strong Financial Position
The company maintained a robust financial position, with $2.21 billion in cash and readily convertible financial assets, providing a solid foundation for future investments and growth opportunities.
Continued Net Loss
Despite improvements, Daqo New Energy reported a net loss of $14.9 million attributable to shareholders, an improvement from the $76.5 million loss in the previous quarter, indicating a gradual path towards profitability.
Industry Overcapacity Concerns
The company acknowledged the ongoing challenge of industry-wide overcapacity, which continues to pressure prices. Discussions on consolidation and regulatory measures are underway to address these concerns.
Cash Flow Challenges
Net cash used in operating activities amounted to $50 million for the nine months ended September 30, 2025, highlighting the need for effective cash flow management amidst growth efforts.
Forward-Looking Guidance
Looking ahead, Daqo New Energy anticipates a production volume of 39,500 to 42,500 metric tons in Q1 2026, with a full-year target of 121,000 to 124,000 metric tons. The company expects China’s new regulations on the polysilicon sector to drive industry consolidation and stabilize prices, potentially benefiting the company’s market position.
In summary, Daqo New Energy’s earnings call reflects a positive trajectory with significant revenue growth and improved EBITDA, despite challenges like industry overcapacity and net losses. The company’s strong financial position and strategic focus on cost reduction and market expansion provide a hopeful outlook for the future.