Duos Technologies Reports 45% Revenue Decline and $3.49 Million Net Loss in Q1 2026

Duos Technologies Group, Inc. reported a significant decline in financial performance for the first quarter of 2026, with total revenues of $2.72 million, down 45% from $4.95 million in the same period last year. The decrease was primarily driven by reduced revenues from technology systems and consulting services, particularly related to the Asset Management Agreement (AMA) with New APR, which saw a 60% drop in related-party revenue. The company recorded a net loss of $3.49 million, compared to a loss of $2.08 million in the prior year, reflecting increased operating expenses and lower revenue generation.

The company's cost of revenues also decreased significantly, falling 69% to $1.11 million from $3.64 million year-over-year. This reduction was attributed to lower personnel-related costs and a decrease in manufacturing activities as the company prepared for the deployment of its high-speed Railcar Inspection Portals. Despite the drop in revenues, the gross margin improved to 59% from 27% in the previous year, largely due to the absence of associated costs for certain revenue streams, including the revenue recognized from the equity interest in Sawgrass Parent.

In terms of strategic developments, Duos Technologies has been focusing on expanding its digital infrastructure and technology solutions. The company has initiated the deployment of modular Edge Data Centers through its subsidiary, Duos Edge AI, which is expected to generate recurring revenue through hosting and managed services. Additionally, the company has entered into a master service agreement with Hydra Host, Inc. to support its GPU-as-a-Service operations, with an estimated capital commitment of approximately $145 million.

Operationally, Duos Technologies has seen a notable increase in its cash position, ending the quarter with $33.03 million in cash, up from $15.47 million at the end of 2025. This increase was primarily due to a successful public offering that raised approximately $65 million in gross proceeds. The company also reported a working capital surplus of $29.18 million, indicating a solid liquidity position to support its ongoing operations and strategic initiatives.

Looking ahead, Duos Technologies aims to continue its transition towards a diversified revenue model, focusing on digital infrastructure, AI technologies, and energy solutions. The company anticipates growth in its Technology Solutions and Edge Data Center segments, driven by increased customer adoption and the expansion of its service offerings. However, management acknowledges that achieving these objectives will depend on various factors, including market conditions, customer demand, and the successful execution of its strategic initiatives.