Daqo New Energy Q2 Loss Triggers Buyback
Daqo New Energy(NYSE:DQ) reported its results for the second quarter of 2025 on Aug. 26, 2025, reporting revenues of $75.2 million. Net loss attributable to shareholders (GAAP) was $76.5 million, driven by both sharply reduced polysilicon sales volumes and persistent industry overcapacity. Management highlighted the initiation of a $100 million share repurchase program, detailed China’s intensified regulatory intervention in the solar supply chain, and addressed evolving pricing policies under the national anti-involution campaign. The following analysis distills three critical insights on strategic balance sheet management, policymaking’s impact on market discipline, and capital allocation shifts, with explicit investment implications for long-term holders.
Despite reporting negative EBITDA of $48 million, the company’s unrestricted cash, term deposits, and short-term investments totaled $2.06 billion as of June 30, 2025, with zero financial debt. This liquidity supports operational resilience and bankrolls strategic initiatives in an environment of negative gross margin (GAAP), which dropped to negative 108% in the second quarter compared to the first quarter of 2025.
This liquidity enables Daqo to endure cyclical troughs, postpone distressed sales, and opportunistically deploy capital into share buybacks or sector consolidation as regulatory shakeouts unfold.
Source Fool.com
