Duos Technologies Group (NASDAQ:DUOT) executives used the company’s fourth-quarter and full-year 2025 earnings call to outline a strategic shift toward data centers, including plans to divest its legacy rail business and expand newer data center infrastructure and sourcing operations.
Strategic shift: exiting rail and leaning into data centers
Newly appointed CEO Doug Recker said the company is now “fully dedicated to the data center market” through its Duos Edge and Technology Solutions division, citing accelerating customer demand.
On Duos Energy Corporation, Recker recapped the company’s asset management agreement (AMA) with New APR Energy, under which Duos helped find new contracts to engineer, procure, construct, and operate fast power plants and received a 5% equity stake in APR Energy’s parent. Recker said Duos previously disclosed the AMA would conclude in 2026, while the company plans to retain the 5% equity stake.
Duos Technology Solutions: new sourcing and distribution business
Recker said Duos created a new division, Duos Technology Solutions, to lower procurement costs for its own data center builds and to sell sourcing and product distribution services to external customers.
He said the company hired Kristen Sanderson as Senior Vice President of Duos Technology Solutions, describing her as an “industry veteran” with “over 18 years of data center product experience.” According to Recker, the division aims to buy direct from manufacturers rather than through traditional distribution channels, which he said can reduce costs by “20%-30%.”
Recker said that through the first quarter, the Technology Solutions division has “already sold $10 million in new business,” which is currently in backlog and “expected to be recorded as revenue this year.” During Q&A, Recker explained that fulfillment timing varies by product category, with items like UPS systems and switchgear sometimes running “6-8” months and “some of them 9 months out.”
When asked about the longer-term potential of the Tech Solutions business, Recker cited a pipeline/funnel of “over $150 million,” noting that figure was based on the funnel generated by two sales representatives hired into the group and reflected “three months of doing business.”
Duos Edge AI: deployments, capital raises, and higher-density demand
Recker positioned Duos Edge AI as the center of the company’s data center strategy, focusing on edge computing demand. He said Duos completed a $45 million capital raise in July 2025 with Titan Partners to fund construction and deployment of 15 edge data centers (EDCs), and said the company achieved its 2025 goal to “procure, manufacture, deploy 15 edge data centers.”
Recker also said Duos Edge AI was awarded a patent for “clean room technology for modular data center deployments,” describing it as a differentiator as modular builds expand across the market. In response to a question about competitors, Recker said GPU deployments are sensitive to dust and particles, and argued warranty concerns make clean-room capabilities important for modular deployments.
In March 2026, Recker said the company completed a $65 million capital raise to deploy approximately 2,300 GPUs as a service, support a 4.8 MW high-density EDC deployment for a “leading hyperscaler,” and expand its high-density EDC footprint. He added that Duos had “five new EDCs in production,” with plans for “an additional 20 MW of deployed capacity by year-end.” In Q&A, Recker clarified that the five EDCs in production were tied to contracted markets (including in Georgia and work with a utility) and were part of the company’s “normal pods,” though built with more power to accommodate higher-density users.
Recker said the company plans to keep its core focus on Tier 3 and Tier 4 markets, citing faster access to power and permitting—typically “90-120 days”—compared with Tier 1 markets where competition is heavier and infrastructure buildouts can take longer.
New contracts: GPU-as-a-Service and high-power colocation
Recker said Duos recently executed its first contract across two newly launched business lines: GPU-as-a-Service and high-power colocation for AI infrastructure.
- GPU-as-a-Service: Recker said Duos will deploy 2,304 NVIDIA GPUs across its edge platform, generating recurring revenue through a GPU rental model. He said the contract is expected to generate approximately $176 million in revenue over 36 months, with “margins exceeding 80%” and expected annual EBITDA of approximately $40 million.
- High-power colocation: Recker said Duos was awarded a contract to deliver 4.8 MW of critical compute power to support a “leading hyperscaler’s” high-density NVIDIA GPU cluster housed within Duos Edge AI data centers.
Recker said the two contracts represent a “significant commercial inflection” and reported incremental inbound interest from hyperscalers, neocloud providers, and other large-scale compute customers.
During Q&A, Recker said the GPU-as-a-Service deployment was targeted for an “August timeframe,” subject to permitting. He also explained that a referenced site is built to 10 MW, with 4.8 MW allocated initially for critical load, and said there is space to add capacity. Recker added that the customer could take the full 10 MW over time and said Duos is evaluating additional sites.
Financial results: revenue growth, margin improvement, and 2026 guidance
CFO Leah Brown reported total consolidated 2025 revenue of approximately $27 million, compared with $7.3 million in 2024—an increase she described as “over a 270%” year-over-year rise. Duos had previously projected 2025 revenue of $28 million, Brown said, but the company recorded “a little over $1 million in deferred revenue for technology solutions,” which was contracted and paid in cash and is expected to be recorded as revenue in 2026.
Brown attributed much of the 2025 revenue growth to services and consulting revenue from the New APR Energy asset management agreement, totaling $22.4 million in 2025 versus $900,000 in 2024.
Duos reported $7.9 million in gross profit and a gross margin of approximately 29%, which Brown said represented a “significant year-over-year improvement” driven by improved cost absorption and operating efficiency. Net loss was approximately $9.8 million, improving from a $10.8 million net loss in 2024, which Brown said was primarily due to higher revenue and stronger gross margin.
Brown also said Duos delivered positive adjusted EBITDA for the second consecutive quarter in Q4, following a positive adjusted EBITDA result in Q3.
On the balance sheet, Brown said Duos ended 2025 with approximately $63 million in total assets and noted cash increased significantly year-over-year due to capital raised. She said property and equipment also increased materially, reflecting continued infrastructure investment. In response to a question, Brown said the majority of PP&E relates to Duos’ 15 edge data centers, along with pre-buying for the next group of deployments planned for 2026. She also cited “current contract liabilities over $5 million” supporting future revenue recognition.
For 2026, Brown provided revenue guidance of $50 million to $55 million across all business lines. She said that due to revenue recognition timing, a significant portion is expected in the second half of the year, “coinciding with the periods in which we expect to achieve positive EBITDA.”
Recker closed by pointing to industry recognition, including an “Innovation of the Year” award at the Pacific Telecommunications Council 2026 conference in January and a nomination for a Tech Capital Global Awards category in May. He also said the company plans to retain an investor relations firm and expects additional analyst coverage as Duos communicates its updated strategy.
About Duos Technologies Group (NASDAQ:DUOT)
Duos Technologies Group, Inc provides advanced non-intrusive security and inspection solutions utilizing motion-based and artificial intelligence technologies. The company’s core offerings include intelligent video analytics, RFID checkpoint systems, and specialized screening devices designed to detect security threats and contraband across transportation, logistics and critical infrastructure environments. Duos integrates proprietary hardware with software to deliver automated inspection and monitoring tools that enhance safety and operational efficiency.
Among its primary products are automated gate-entry systems, railcar inspection portals and portable screening devices that use AI-driven image recognition and sensor fusion to identify objects such as unauthorized materials, pipeline anomalies or vehicle defects.
