Duos Completes Rail Sale and Reaffirms 2026 Outlook
Second-quarter revenue rose 30% to $6.18 million as Technology Solutions reached $3.23 million and contracted capacity hit 25 MW.
Duos Technologies Group (DUOT), a provider of modular edge data centers and AI infrastructure, posted $6.18 million of revenue in the second quarter ended June 30, 2026, a 30% increase from $4.77 million a year earlier. That gain reversed a 45% sequential drop to $2.72 million in the first quarter. The increase was driven primarily by Technology Solutions, which reached $3.23 million from about $562,000 in the prior quarter. Services and consulting fell to $2.91 million as the company reduced the Duos Energy asset-management agreement and New APR Energy sold substantially all of its assets in May. Hosting contributed $0.03 million.
Cost of revenues declined 9% to $2.73 million, and gross margin rose 94% to $3.45 million. Operating expenses increased 2% to $3.40 million on higher sales and marketing and general and administrative costs. The company recorded net operating income of $0.05 million, versus a $1.54 million operating loss a year earlier, its first positive operating quarter as a data center infrastructure company. Adjusted EBITDA was $0.5 million; the company did not report the measure in the prior-year period.
Net income before taxes was $53.64 million, versus a $1.62 million loss a year earlier, driven primarily by a $53.17 million gain on sale of investments tied to the New APR asset sale. Basic and diluted net income per share was $1.61 and $1.37, versus a $0.14 loss on both bases a year earlier. Cash and cash equivalents were $112.31 million at June 30, versus $15.47 million at year-end 2025, after a $55 million registered direct offering and $50.4 million of New APR proceeds. The company also had over $15.90 million in receivables and contract assets, for about $128.21 million in cash and expected short-term liquidity.
The quarter completed the sale of the rail technology subsidiary Duos Technologies, Inc., finishing a repositioning toward edge data centers and AI infrastructure through Duos Edge AI and Duos Technology Solutions. Contracted capacity rose to 25 MW, all planned for 2026 deployment, from 10 MW contracted with 15 MW planned in the first quarter. The company signed five-year, 55 MW hosting agreements with Axe Compute valued at more than $500 million and secured $111 million of contracted revenue with an investment-grade hyperscaler for 10 MW at its Columbus, Georgia campus. It also entered an exclusive term sheet with 0Lat LLC for a proposed structured lease across a 15-site, 225-cabinet portfolio in Texas and Georgia.
Bookings at quarter-end were approximately $43.5 million, expected to be recognized during 2026, including contracted backlog and near-term anticipated awards. Duos Technology Solutions had about $28 million in backlog so far in 2026. The company reaffirmed 2026 guidance of 25 MW deployed and over $50 million in revenue, after remaining on target for $50 million in the first quarter. A significant portion of that revenue is anticipated in the second half, aligned with project timing and infrastructure deployments.
Chief Executive Officer Doug Recker said the company secured over $100 million in growth capital through the $55 million direct investment and the $50.4 million New APR proceeds, and that the rail divestiture would let it concentrate resources on the edge and AI businesses. He said the company agreed to the $111 million, 10 MW hyperscaler contract, adding to backlog and supporting the reaffirmed outlook. The company expects services revenue from hosting and technology solutions to increase throughout 2026 as additional edge data centers come online.