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DUOS TECHNOLOGIES GROUP, INC. (DUOT)·Q1 2025 Earnings Summary

Executive Summary

  • Revenue of $4.95M, up 363% YoY, driven by $3.9M of AMA-related services with New APR Energy; revenue beat consensus ($4.30M) while EPS matched at $(0.18). Bold: Revenue beat vs consensus; EPS in line *.
  • Gross margin increased to $1.31M (vs $0.09M YoY), aided by $904k recognized from a 5% equity interest in New APR at 100% margin; management expects further margin improvement in Q2 .
  • FY25 revenue guidance maintained at $28–$30M; CFO indicated Q2 revenue should be similar to Q1, with breakeven and positive adjusted EBITDA expected in 2H25 .
  • Execution catalysts: rapid AMA ramp (570MW contracted, targeting ~730MW), accelerating Edge Data Center (EDC) deployments (commitments for eight additional sites; goal of 15 units by YE25), and growing backlog ($45.4M, with ~$17.4M expected to be recognized in 2025 plus $7–$8M near-term awards) .

What Went Well and What Went Wrong

What Went Well

  • Services and consulting strength: $4.89M of recurring services/consulting revenue in Q1, including $3.91M from the AMA with New APR; “delighted with the progress … speed at which the Duos team has adapted” .
  • Margin uplift: gross margin rose to $1.31M, aided by $904k from the 5% non-voting equity interest in New APR recognized at 100% margin; CFO reiterated expected margin improvement as AMA contribution grows .
  • EDC pipeline momentum: first production EDC began generating revenue April 1; orders placed bringing owned units to 10, with 15 targeted by YE25; hyperscaler interest and multiple engagements underway .

What Went Wrong

  • Technology systems weakness: only ~$65k of technology systems revenue due to customer site delays for two high-speed Railcar Inspection Portals; management remains confident in RIP product potential .
  • Higher costs: cost of revenues rose to $3.64M, including ~$2.66M AMA-related costs and $548k amortization tied to a non-monetary transaction; operating expenses increased to $3.10M, largely from non-cash stock comp .
  • Continued losses and cash burn: net loss of $2.08M (vs $2.75M YoY); cash fell to $3.80M from $6.27M at YE24, though liquidity supported by $2.68M receivables/contract assets .

Financial Results

Quarterly Performance vs Prior Periods

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD)$3,238,910 $1,460,000 $4,952,185
Gross Margin ($USD)$919,099 $(330,000) $1,313,659
Operating Expenses ($USD)$2,839,379 $2,760,000 $3,103,287
Loss from Operations ($USD)$(1,920,280) $(3,090,000) $(1,789,628)
Net Loss ($USD)$(1,401,663) $(3,410,000) $(2,079,663)
Diluted EPS ($USD)$(0.18) N/A$(0.18)

Year-over-Year (Q1)

MetricQ1 2024Q1 2025
Revenue ($USD)$1,070,680 $4,952,185
Gross Margin ($USD)$94,632 $1,313,659
Diluted EPS ($USD)$(0.38) $(0.18)

Actuals vs S&P Global Consensus (Q1 2025)

MetricConsensusActual
Revenue ($USD)$4,300,000*$4,952,185
Primary EPS ($USD)$(0.18)*$(0.18)

Values with asterisk (*) retrieved from S&P Global.

Revenue Composition (Q1 2025)

Revenue ComponentQ1 2025 ($USD)
Technology systems$64,684
Services and consulting$972,751
Services and consulting – related parties$3,914,750
Total Revenues$4,952,185

KPIs and Backlog

KPIQ3 2024Q4 2024Q1 2025
Comprehensive railcar scans>2.3M Full-year ~10M images; not comparable quarterly >2.3M
Unique railcars scanned379,000 N/A379,000
Backlog (revenue)$18.8M $50.5M (incl. near-term extensions) $45.4M
Expected 2025 recognition from backlogN/A~$22.6M ~$17.4M
Near-term awards/renewals (2025)N/A~$8–$9M ~$7–$8M
AMA contracted power (MW)Initial consulting $0.5M revenue 390MW deployed; 90MW assumed; further 240MW targeted 570MW contracted; targeting ~730MW in 2 weeks

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueFY 2025$28–$30M (reinstated) $28–$30M (reiterated) Maintained
Quarterly RevenueQ2 2025Not provided“Similar to Q1” New color
Adjusted EBITDAFY 2025Positive in 2H25; breakeven/make money in Q3–Q4 Breakeven/make money in Q3–Q4; positive adjusted EBITDA Maintained
EDC deploymentsYE 202515 pods 15 pods; 10 units ordered/owned; 8 additional commitments Maintained; execution progressing
Gross margin trajectoryQ2 2025Not provided“Further improvements expected in Q2” New color

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q3’24; Q-1: Q4’24)Current Period (Q1’25)Trend
Edge Data Centers (EDC)Added 3 new EDCs (total 6); initial customer ARR indications ~$3.3M for 2025 First production EDC revenue began 4/1; commitments for eight more sites; 15 by YE25 Accelerating deployments
AMA/power rampInitial deployments (90MW utility; +300MW data center); 390MW secured; targeting +240MW 570MW contracted; ~730MW expected; multiple US/MX projects Rapid ramp, expanding pipeline
Tariffs/macroTariff risk discussed; limited impact expected on materials, power assets in US No impact to date; shielded on power; monitoring EDC materials Monitored; minimal impact
Rail RIP productQ3: $1.4M change order boost; slow adoption cycle Customer site delays persist; technology revenue minimal; confidence in long-term potential Delayed installations; subscription pivot
Regulatory/legalPatent infringement actions against Norfolk Southern discussed Not a focus in Q1 callOngoing backdrop
R&D executionR&D down in 2024 full-year; reallocation R&D up 11% in Q1 to support AMA/EDC product enhancements Investment rising in 2025

Management Commentary

  • “I am delighted with the progress we have made in the first quarter and am very impressed at the speed at which the Duos team has adapted to the new opportunities in the Data Center and Power business.” — Chuck Ferry, CEO .
  • On power margins: “On the Power business … that’s a good number to think about for our gross margin.” (approx. 32%) — Chuck Ferry, with CFO confirmation .
  • “We have customer commitment for an additional eight Edge Data Centers and expect to complete these installations in the coming six months … confident in our plan to place 15 Edge Data Centers by the end of this year.” — Chuck Ferry .
  • “We are maintaining guidance … expect to record between $28 million and $30 million in consolidated revenue … Q2 will be similar to Q1 … breakeven and may make money in the third and fourth quarters … end the full year with positive adjusted EBITDA.” — Adrian Goldfarb, CFO .

Q&A Highlights

  • Power gross margin framing: Analysts probed margin level; management indicated ~32% is reasonable for 2025 with potential improvement .
  • Hyperscaler engagement: Active discussions with 3–4 hyperscalers for EDC compute and behind-the-meter power; one hyperscaler already using APR turbines .
  • Tariffs: No current impact; shielded on power assets; EDC materials monitored; demand strong across lines of business .
  • Near-term cadence: CFO expects Q2 revenue similar to Q1; stock comp ~$500–$600k/quarter; depreciation to rise as EDCs come online .

Estimates Context

  • Q1 2025 results vs consensus: Revenue beat ($4.95M actual vs $4.30M consensus); EPS matched (($(0.18)) actual vs ($(0.18)) consensus). Bold: Revenue beat; EPS in line *.
  • With a beat on revenue and in-line EPS, forward estimates may rise for services/consulting and AMA contribution while EPS revisions hinge on stock comp trajectory and margin mix *.

Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

  • The AMA with New APR Energy is scaling quickly (570MW contracted, ~730MW targeted), underpinning services revenue and margin improvement into Q2/Q3 .
  • EDC commercialization is underway (revenue began 4/1), with eight additional commitments and a YE25 target of 15 units—supporting ARR growth and diversified revenue streams .
  • Backlog is robust at $45.4M with ~$17.4M expected to be recognized in 2025 plus $7–$8M near-term awards, providing visibility as deployments progress .
  • FY25 revenue guidance ($28–$30M) was reiterated; CFO guided Q2 revenue similar to Q1 and positive adjusted EBITDA in 2H25—key catalysts for sentiment .
  • Technology systems remain constrained by site delays, but subscription/data initiatives and eventual deployments could unlock higher-margin growth longer term .
  • Liquidity is tighter ($3.80M cash vs $6.27M at YE24) but supported by receivables/contract assets; execution on AMA and EDC rollouts is critical near-term .
  • Monitoring: margin mix (AMA vs services), tariff impacts on EDC materials, and timing of RIP installations; any hyperscaler wins would be upside .