Daqo Sees Revenue Jump to $244.6M, EBITDA Margin Soars to 18.7%
Revenue surged to $244.6 million in Q3 from $75.2 million in Q2, driving a positive gross margin of 3.9% and an 18.7% EBITDA margin after six quarters of losses. Operating at 40% capacity, Daqo cut cash costs to $4.54/kg and holds $2.21 billion cash, though $6.38/kg production costs still exceed $5.80/kg selling price.
1. Q3 2025 Financial Turnaround
Daqo reported Q3 revenue of $244.6 million versus $75.2 million in Q2, reversing six quarters of losses. Gross margin improved to 3.9% from negative 108%, while EBITDA margin rebounded to 18.7%, driven by higher polysilicon prices and prior inventory write-down benefits, though GAAP net loss remained $14.9 million.
2. Cost Structure and Operations
Cash costs declined 11% sequentially to $4.54/kg, marking a record low, while total production cost fell to $6.38/kg. At 40% capacity utilization, the company produced 30,650 MT and sold 42,406 MT, drawing down inventory by 11,750 MT to monetize stockpiles from prior low-price periods.
3. Regulatory Advantage
Daqo’s energy-intensive Siemens process consumes 52-55 kWh/kg, well below China’s new 64 kWh/kg mandatory standard that took effect in September 2025. This embeds a regulatory moat, as 20-30% of older capacity may face restrictions, reinforcing Daqo’s cost leadership without near-term capacity cuts.
4. Outlook and Structural Challenges
Despite a debt-free balance sheet and $2.21 billion in cash, production costs still exceed selling prices, creating a $1.33/kg shortfall when including overhead. Sustainable profitability will require polysilicon prices to rise above $8.50/kg, cash costs to fall below $4.00/kg, or utilization to ramp to 75–80%.