Sign in

You're signed outSign in or to get full access.

DT

DUOS TECHNOLOGIES GROUP, INC. (DUOT)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $6.88M, up 112% YoY; Adjusted EBITDA turned positive at ~$0.49M (7% margin), driven by the Asset Management Agreement (AMA) with New APR Energy and initial Edge Data Center (EDC) hosting revenue .
  • EPS beat consensus: -$0.06 actual vs -$0.12 estimate; revenue slightly missed: $6.88M actual vs $7.30M estimate. Consensus based on one estimate each; values retrieved from S&P Global*.
  • FY2025 revenue guidance maintained at $28–$30M, underpinned by ~$25.8M backlog with ~$12.4M expected to be recognized in Q4 (including ~$9.5M contracted and ~$3M near-term awards) .
  • Strategic pivot to edge computing accelerating: six EDCs deployed with nine planned in Q4, first out-of-state site in Illinois; patent granted for modular data center “Entryway,” enhancing reliability and SOC 2-ready access control .

What Went Well and What Went Wrong

What Went Well

  • Adjusted EBITDA profitability achieved one quarter early: ~$0.49M, 7% margin, reflecting higher gross margin from AMA and disciplined OpEx management .
  • Strong liquidity and de-leveraging: cash and equivalents $33.20M at 9/30/25; all debt retired; shareholders’ equity ~$49.5M, enabling EDC buildout .
  • EDC momentum and IP differentiation: six sites deployed; nine more planned in Q4; USPTO patent for clean-room “Entryway” bolsters uptime and security standards for rural deployments. “We’re building the next generation of mini carrier hotels...” (Doug Recker) .

What Went Wrong

  • Revenue modestly below consensus: $6.88M vs $7.30M; technology systems revenue subdued due to customer-site delays for two high-speed RIPs (Amtrak) .
  • OpEx increased 28% YoY to $3.63M, mainly from non-cash stock comp tied to new employment agreements; rail business remains flat and undergoing restructuring .
  • AMA concentration risk: significant portion of services revenue tied to New APR Energy; management flagged AMA concludes in 2026, requiring continued scale-up in EDC and new data center sourcing initiatives .

Financial Results

Core P&L Metrics vs Prior Quarters (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD)$4,952,185 $5,736,041 $6,877,283
Gross Margin ($USD)$1,313,659 $1,518,956 $2,516,402
Loss from Operations ($USD)$(1,789,628) $(3,440,683) $(1,115,980)
Net Loss ($USD)$(2,079,663) $(3,518,031) $(1,040,254)
EPS (Basic & Diluted) ($USD)$(0.18) $(0.30) $(0.06)

Q3 2025 Actual vs Wall Street Consensus

MetricActualConsensusSurprise
Revenue ($USD)$6,877,283 $7,300,000*Miss ($422,717)
EPS ($USD)$(0.06) $(0.12)*Beat $0.06

Values retrieved from S&P Global*.

Q3 2025 Segment / Revenue Composition

ComponentQ3 2024Q3 2025
Technology Systems ($USD)$1,686,456 $263,910
Services & Consulting ($USD)$1,552,454 $1,436,568
Services & Consulting – Related Parties ($USD)— $5,152,805
Hosting ($USD)— $24,000
Total Revenues ($USD)$3,238,910 $6,877,283

KPIs and Operating Metrics

KPIQ3 2025
Backlog ($USD)~$25.8M total; ~$12.4M expected in remainder of 2025 (incl. ~$9.5M contracted and ~$3.0M near-term)
Adjusted EBITDA ($USD)~$491,000; 7% margin
Cash & Cash Equivalents ($USD)$33.20M at 9/30/25
EDC Deployment6 deployed; 9 scheduled in Q4; first out-of-state site in Illinois
5% APR Equity Revenues Recognized$904,125 in Q3 (100% margin)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$28–$30M $28–$30M (reiterated) Maintained
Adjusted EBITDA ProfitabilityFY 2025 timingFirst quarter of breakeven/profitability expected in Q4 2025 Achieved positive Adjusted EBITDA in Q3 2025 (~$0.49M; 7%) Earlier than expected

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
AI/Compute demand & power scarcityPivot to EDCs; hyperscaler discussions; AMA powering Mexico/US sites “Arms race for AI computing power”; edge favored due to power constraints; pursuing 2–3 large developers Strengthening
Edge Data Centers rolloutPlan for 15 in 2025; unit economics ($1.2–$1.4M per pod; $350–$500k annual revenue) 6 deployed; 9 in Q4; first in Illinois; “mini carrier hotels” vision Accelerating
Supply chain & sourcing strategyManaged smaller components; capital raised to fund deployments New “Duos Technology Solutions” strategic sourcing to supply infrastructure equipment to DC builders Expanding scope
Rail (RIP) businessFlat; Amtrak projects delayed; plan for later deployment Two high-speed RIPs ready but site delays; rail restructuring underway Under review
Tariffs/macroNo material impact; shielded via AMA assets and EDC supply partners Focus shifts to execution; macro commentary limited; edge seen as solution to grid stress Neutral
Regulatory/Compliance & Security—Patent “Entryway” enables clean-room and man-trap; supports SOC 2 compliance Improving

Management Commentary

  • “We are well positioned to capture market share for products and services related to [edge computing]... we are reiterating [FY2025] revenue expectations $28–$30 million.” — Chuck Ferry, CEO .
  • “For Q3, we achieved full quarter profitability on an Adjusted EBITDA basis, totaling a little over $491,000... Adjusted EBITDA margin of 7%.” — Leah Brown (incoming CFO) .
  • “We are building the next generation of mini carrier hotels... bringing compute and network power closer to the end user.” — Doug Recker, President .

Q&A Highlights

  • AI/Cloud demand: Hyperscalers constrained by power; edge deployments enable faster, distributed compute; building Tier 3/Tier 4 market infrastructure to improve peering and latency .
  • EDC deployment cadence: Six installed; four shipping this month and five by early December; off-the-shelf components enable quick lead times; ~120-day timeline for 5MW modular deployments .
  • Patent impact: Clean-room “Entryway” with AI auditing supports warranties and SOC 2; enhances reliability in harsh environments .
  • Regional strategy: Education-sector proof points (Region 16, TX); first contract in Illinois; targeting underserved/rural markets for AWS access and carrier peering .
  • AMA trajectory: Strong contributor in 2025; APR building independent operations; Duos expects EDC and sourcing initiatives to offset AMA taper post-2026 .

Estimates Context

  • Q3 2025 EPS beat: -$0.06 actual vs -$0.12 consensus; revenue slight miss: $6.88M actual vs $7.30M consensus. Only one estimate for each metric; expect limited Street coverage but positive EPS surprise could support sentiment. Values retrieved from S&P Global*.

Key Takeaways for Investors

  • EPS beat with first positive Adjusted EBITDA marks an execution milestone; supports pivot credibility and potential re-rating if sustained .
  • Revenue mix increasingly services/AMA and EDC hosting; near term supported by ~$25.8M backlog with ~$12.4M slated for Q4 recognition .
  • Liquidity and de-leveraging create runway: $33.2M cash, zero debt; shareholders’ equity ~$49.5M to fund rapid EDC rollout .
  • Edge strategy differentiation via patent and SOC 2-ready design; “mini carrier hotel” positioning targets underserved markets and hyperscaler edge needs .
  • Watch AMA concentration and 2026 transition: management proactively building Duos Technology Solutions to diversify DC revenue sources .
  • Near-term trading: EPS beat vs limited consensus and EBITDA inflection are positives; revenue miss modest and tied to timing; Q4 recognition/backlog cadence is key.
  • Medium-term thesis: Scaling EDC footprint (15 in 2025; broader 2026 plan) and strategic sourcing could offset AMA sunset; monitor cabinet fill rates, recurring revenue growth, and margin trajectory .

Footnote: Values retrieved from S&P Global* for consensus estimates.