Daqo New Energy 2025 Q1 Earnings Misses Targets as Net Income Falls Sharply

Daqo New Energy Corp., a leading manufacturer of high-purity polysilicon for the global solar PV industry, reported its fiscal 2025 Q1 earnings on April 29th, 2025. The company missed analyst expectations with an adjusted net loss of $0.80 per ADS, against the projected loss of $0.69 per ADS. Revenue also fell short at $123.9 million, a 70% year-over-year decrease, amidst ongoing market challenges. Guidance for the year remains cautious, reflecting current market uncertainties.

Revenue

The first-quarter revenue for Daqo New Energy Corp. stood at $123.9 million, showing a significant decrease from $195.4 million in the previous quarter and $415.3 million from the same quarter last year, primarily due to a decline in sales volume.

Earnings/Net Income

For the first quarter of 2025, Daqo New Energy reported a net loss of $0.21 per share, a sharp decline from a profit of $0.05 per share in the same period the previous year. The company also recorded a net loss of $92.73 million, compared to a net income of $28.15 million in Q1 2024. The negative EPS reflects challenging market conditions.

Price Action

Post Earnings Price Action Review

Following the earnings report, Daqo New Energy's stock price experienced a downward trend, with a 9.59% drop on the latest trading day, a 7.53% decline over the past trading week, and a 30.07% decrease month-to-date. Despite the disappointing figures, historical backtesting data suggest some potential for short-term price improvement, with win rates of 48.72% over three days, 48.56% over ten days, and 50.72% over thirty days following earnings announcements. The maximum return observed post-earnings was 11.20% on day 79, indicating the possibility of a rebound in stock price. Investors may consider these metrics when evaluating the stock's potential movement after earnings releases.

CEO Commentary

Mr. Xiang Xu, CEO of Daqo New Energy, highlighted the ongoing challenges in the solar PV industry, such as overcapacity and low polysilicon prices. He noted that despite these challenges, the company has reduced its losses sequentially and maintained a strong balance sheet with no financial debt. Daqo operated at 33% utilization and successfully lowered inventory levels. Mr. Xu remains optimistic about the long-term prospects of the solar market, driven by increasing demand and a shift to market-based pricing mechanisms.

Guidance

Daqo New Energy anticipates producing approximately 25,000 MT to 28,000 MT of polysilicon in Q2 2025 and expects a total production volume of 110,000 MT to 140,000 MT for the full year of 2025, considering annual maintenance. The outlook is preliminary and subject to market risks and uncertainties.

Additional News

Within three weeks of April 29th, 2025, Daqo New Energy Corp. announced the filing of its annual report on Form 20-F for the fiscal year ending December 31, 2024. This filing with the SEC includes the company's audited consolidated financial statements. The report is accessible on the SEC's website and through Daqo's investor relations section. Additionally, the company confirmed plans to release its unaudited financial results for the first quarter of 2025 before U.S. markets open on April 29, 2025, with a subsequent conference call scheduled to discuss the results. These updates reflect Daqo's commitment to transparent financial communication and strategic planning in a challenging market environment.