Surge in Sales Volume and Polysilicon Prices Drives Revenue Recovery
Daqo New Energy's third quarter of 2025 marks a distinct reversal of fortune. The company, one of the world's lowest-cost producers of high-purity polysilicon, reported revenue of $244.6 million—over triple the previous quarter's $75.2 million. This turnaround was fueled by a record sales volume of 42,406 metric tons (MT), up from 18,126 MT in Q2, and a sharp rise in average selling price to $5.80/kg from $4.19/kg. The improvement follows a sector-wide price rebound, with China's policy tightening and new efficiency standards supporting healthier industry fundamentals.
| Key Financial Metrics | Q3 2025 | Q2 2025 | Q3 2024 |
|---|---|---|---|
| Revenues (US$ million) | 244.60 | 75.20 | 198.50 |
| Polysilicon Sales Volume (MT) | 42,406 | 18,126 | 42,101 |
| Average Selling Price ($/kg) | 5.80 | 4.19 | N/A |
| Gross Profit (US$ million) | 9.70 | -81.40 | -60.60 |
| Gross Margin (%) | 3.90 | -108.30 | -30.50 |
Cost Discipline Yields Lowest-Ever Cash Cost Per Kg
Management highlighted operational efficiency as a key theme. Total polysilicon production cost fell 12% to $6.38/kg (from $7.26/kg in Q2), while cash cost dropped to a company record of $4.54/kg, down from $5.12/kg. This reflects not only internal improvements but also better capacity utilization and reduced idle facility expenses. Despite maintaining a utilization rate of 40% to counteract industry oversupply, Daqo was able to outpace its guidance range on production, and bring inventories to a healthier level as sales exceeded output for the quarter.
Positive EBITDA and Adjusted Profit Reflect Core Turnaround
For the first time in three quarters, Daqo posted a positive EBITDA of $45.8 million, compared to a negative $48.2 million in Q2. The EBITDA margin jumped to 18.7% from -64.0% in the previous period, underscoring a marked improvement in core business operations. On a non-GAAP basis (excluding share-based compensation), adjusted net income turned positive at $3.7 million, swinging from a loss of $57.9 million in Q2. However, net loss attributable to shareholders remained at $14.9 million, albeit a significant reduction from $76.5 million the prior quarter.
| Profitability Metrics | Q3 2025 | Q2 2025 | Q3 2024 |
|---|---|---|---|
| EBITDA (US$ million) | 45.80 | -48.20 | -34.30 |
| EBITDA Margin (%) | 18.70 | -64.00 | -17.30 |
| Adjusted Net Income (US$ million) | 3.70 | -57.90 | -39.40 |
| Net Loss (US$ million) | -14.90 | -76.50 | -60.70 |
| Loss Per Basic ADS (US$) | -0.22 | -1.14 | -0.92 |
Balance Sheet Remains a Key Strength Amid Market Volatility
Daqo exited the quarter with $2.21 billion in highly liquid assets—an increase of $148 million from the prior quarter—comprising cash, short-term investments, bank notes receivable, and fixed term deposits. With no bank loans on its balance sheet, Daqo has both resilience and flexibility to navigate ongoing industry adjustments and to seize emerging opportunities as market conditions recover further.
Industry and Policy Tailwinds Set the Stage for Further Gains
New energy efficiency standards, China’s regulatory actions to curb overcapacity, and rising global climate commitments have all started to benefit the sector. With the government aiming to triple wind and solar power capacity by 2035, management expects ongoing improvement in supply-demand dynamics and pricing stability for polysilicon. Daqo is positioning itself at the front of these trends with further cost optimizations, digital transformation, and enhanced high-efficiency product offerings.
Guidance Points to Continued Momentum
For Q4 2025, Daqo guides for polysilicon production between 39,500 and 42,500 MT and full-year output of 121,000–124,000 MT. If realized, this will reflect a strong rebound from earlier 2025 lows. Investors will be watching whether industry rationalization continues to support margins, and how the company leverages its strong financial position and technological edge in a competitive landscape.
Takeaway: Turnaround is Real, but Watch the Bottom Line
While Daqo’s third-quarter performance doesn’t erase the challenges of prior quarters, the rapid recovery in core profits, volumes, and industry pricing provides renewed optimism for the road ahead. The company’s discipline in costs and capital allocation, along with supportive market and policy trends, are positive signals—but net profitability will remain a critical focus as sector dynamics evolve. For those following the solar materials supply chain, Daqo’s Q3 stands as an important bellwether for broader industry stabilization and the next stage of growth.
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