Duos Technologies Group (NASDAQ:DUOT) reported first-quarter financial results on Monday. The transcript from the company’s first-quarter earnings call has been provided below.
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The full earnings call is available at https://ir.duostechnologies.com/news-events/ir-calendar
Summary
Duos Technologies Group, Inc. launched a new division called Duos Technology Solutions, gaining traction with a backlog of approximately $14 million expected to be invoiced by the end of 2026.
The company is proceeding with the divestiture of its legacy rail division, aiming to free up capital and reduce overhead to focus on growth in the data center sector.
A potential acquisition of APR Energy, in which Duos holds a 5% stake, could result in a significant financial windfall if confirmed.
Duos completed a $65 million capital raise, ending Q1 with $33 million in cash, and has received substantial customer deposits, ensuring strong capitalization for near-term projects.
The Hydro Host GPU as a service agreement, valued at $176 million over 36 months, is expected to generate high margins and $40 million in EBITDA.
The company secured a major colocation contract to deliver 4.8 megawatts for a hyperscaler, reinforcing its edge data center platform.
Duos plans to expand its physical deployment to 25 megawatts by the end of 2026, with a target to double capacity to 50 megawatts by 2027.
Despite lower revenues from the APR Asset Management Agreement wind-down, Duos achieved a 59% gross margin in Q1 due to cost reductions.
Management outlined a pathway to achieving a $50 million revenue target for the year, with significant contributions expected from GPU services and Technology Solutions.
Duos is positioning itself as a key player in the AI infrastructure market, targeting rapid deployment of edge data centers in tier 2 and tier 3 markets.
Full Transcript
OPERATOR
Duos Technologies Group Inc Technologies just held their Q1 2026 earnings call. If you’ve been sleeping on this small cap AI infrastructure play, you might want to wake up. We’re breaking down the 10 most important takeaways from the call, counting down from number 10 to the single biggest thing investors need to know. Let’s get into it. Coming in at number 10, Duos Technologies Group Inc launched a brand new division called Duos Technologies Group Inc Technology Solutions and it’s already gaining serious traction.
In just one quarter, the team signed eight new large data center operators and built a backlog of approximately $14 million, all of which is expected to ship and be invoiced before the end of 2026. This asset light business was created to reduce procurement costs internally, but it’s now opening up a whole new revenue stream. At number nine, the company’s legacy rail division divestiture is moving forward. A fairness opinion is currently underway.
Expected to wrap up in Q2, this is a deliberate strategic move. Once complete, it will free up capital, reduce overhead and let management laser focus on the high growth data center opportunity. Number eight is potentially one of the most intriguing wild cards in the story. During the Q and A, an analyst flagged an FTC filing suggesting Elon Musk may be acquiring APR Energy, the same company in which Duos Technologies Group Inc holds a 5% equity stake.
CEO Doug Recker confirmed it’s the same company, but couldn’t comment further. Depending on how that deal shakes out, Duos Technologies Group Inc could see a meaningful windfall from that stake. Number seven is all about the balance sheet. After closing a $65 million capital raise in March, Duos Technologies Group Inc ended Q1 with $33 million in cash. On top of that, they’ve already received a $15 million customer deposit in May with another $3 million pending.
The company is well capitalized to fund near term deployments without needing to raise again soon. At number six, the Hydro Host GPU as a service agreement is the crown jewel of the current business model. Duos Technologies Group Inc is deploying 2,304 Nvidia GPUs across its Edge data center platform under a 36 month contract worth approximately $176 million in total revenue management projects, margins exceeding 80% and roughly $40 million in EBITDA from this single deal alone.
Number five is another major contract win. Duos Technologies Group Inc was awarded a high power colocation deal delivering 4.8 megawatts of critical compute capacity to support a leading hyperscalers high density GPU cluster. Together with the Hydro Host deal, this establishes two complementary high margin revenue streams and validates the edge data center platform at real scale. Number four speaks to the pace of physical deployment. Duos Technologies Group Inc currently has 10 megawatts contracted and plans to deploy an additional 15 megawatts across sites in Maryland, Iowa, Georgia and Texas by year end.
That 25 megawatt target in 2026 is expected to double to 50 megawatts in 2027, reflecting the rapid scaling of the platform. Number three is about profitability. Despite lower revenues due to the planned wind down of the APR Asset Management Agreement, Duos Technologies Group Inc delivered a 59% gross margin in Q1, a significant improvement year over year that was driven by cost reductions and approximately $900,000 in APR equity revenue that came in at 100% gross margin with zero associated cost of goods.
At number two, Management laid out a clear bridge to their full year $50 million revenue target. GPU as a service is expected to contribute roughly $26 million largely in the second half. Technology Solutions adds another $26 million from committed backlog. The remaining balance comes from colocation infrastructure services and new customer wins a significant back half. Waiting means investors need patience, but the visibility is there and the number one takeaway from this earnings call is the broader thesis.
Duos Technologies Group Inc is positioning itself at the center of the AI inference build out in tier 2 and tier 3 markets while hyperscalers race to build gigawatt campuses. There’s an exploding need for fast deployable 5 to 10 megawatt edge data centers that can go live in under six months. Duos Technologies Group Inc targets stranded power in underserved markets, deploys modular infrastructure quickly and captures long term recurring colocation contracts.
The CEO put it plainly. He has 21 Neo clouds on his wall right now. Who would take capacity today if he had it. The demand is real, the contracts are signed and the revenue ramp starts now.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.
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