DUOT · Duos Technologies Group, Inc.

Duos Technologies' first-quarter results reflect the ongoing strategic shift away from legacy rail and energy services toward AI infrastructure. Revenue declined 45% year-over-year to $2.72 million, primarily due to the planned ramp-down of the Duos Energy and New APR asset management agreement. However, gross margin improved to $1.61 million (59% of revenue) versus $1.31 million (26.5%) in the prior year, driven by lower cost of goods sold and the contribution of $0.9 million in high-margin related-party revenue from Duos' 5% equity stake in New APR's parent. Operating expenses rose 69% to $5.24 million, largely from increased sales and marketing spend to support business development and general and administrative costs. Net loss widened to $3.49 million from $2.08 million, with diluted EPS of ($0.15) versus ($0.18).

Cash and cash equivalents surged to $33.03 million at March 31, 2026, from $15.47 million at year-end 2025, after a $65 million capital raise in March. The company also received a $15 million customer prepayment post-quarter. Management reaffirmed full-year 2026 revenue guidance to exceed $50 million, supported by $43.5 million in booked backlog—including $26 million from the GPU-as-a-Service contract with Hydra Host—and a $14 million Technology Solutions backlog. Adjusted EBITDA was negative $1.5 million in Q1, but the company expects positive adjusted EBITDA in the second half of 2026 as deployments accelerate.

CEO Doug Recker highlighted the execution phase of the Hydra Host partnership, noting that the deployment of 2,304 NVIDIA GPUs is ahead of schedule, with revenue recognition expected to begin in July. The company also has 10 MW of colocation contracted and an additional 15 MW planned for 2026, targeting underserved Tier 3 and Tier 4 markets. The planned divestiture of the legacy rail inspection business is on track for the second half of 2026, which should further sharpen the company's focus on high-growth data center infrastructure.