Duos lifts second-quarter revenue 30% to $6.18 million as it shifts to data centers
Key Facts
Duos Technologies’ revenue from continuing operations rose 30% to $6.18 million in the second quarter of 2026, compared with $4.77 million in the same period of 2025, according to the company’s official results announcement. Gross margin increased to 55.8% from 37.3% a year earlier, a gain of 18.5 percentage points. The company also posted operating income of $49,093, after an operating loss of $1,540,182 in the second quarter of last year. The company said technology solutions revenue was the primary driver of growth, while a decline in services and consulting offset part of the increase. The results came before the company completed its transition to data center operations: the sale of its rail business was completed in August, and the company later completed the sale of its GPU-as-a-Service business.
In dollar terms, gross profit rose to $3.45 million from $1.78 million a year earlier, an increase of 94%, according to the results statement. Duos attributed the improvement to lower costs of revenue related to the asset management agreement and a growing contribution from technology solutions. The company said the business became its largest source of revenue from continuing operations in the second quarter. But it depends on fulfilling customer orders, so the timing of revenue recognition may vary from quarter to quarter. In the first half of 2026, total revenue fell 4% to $8.32 million from $8.68 million, despite a 48% increase in gross profit to $4.50 million from $3.03 million. Operating expenses in the first half rose 49% to $7.63 million, compared with $5.11 million a year earlier.
Cash and cash equivalents totaled $112.31 million on June 30, 2026, compared with $15.47 million on Dec. 31, 2025. The company estimated total cash, receivables and short-term contract assets at about $128.21 million at the end of June. But positive operating income does not mean all earnings items reflect recurring business performance: pretax income was $53.64 million in the quarter, after a pretax loss of $1.62 million in the comparable period. The company attributed the increase mainly to a gain on the sale of New APR investments. It also reported adjusted EBITDA of $0.5 million in the second quarter and said it expects positive adjusted EBITDA for fiscal 2026.
The sale of the rail business marked a complete exit from a sector that historically accounted for most of the company’s operations, revenue and workforce, and was completed on Aug. 5, 2026. On Sept. 30, Duos completed the sale of its GPU-as-a-Service subsidiary to Axe Compute. The company said the transaction removed about $98.1 million in expected equipment financing, while service to a Columbus customer continues under a new 5-year agreement. This shifted the business and financing structure, after the company announced 5-year hosting orders with Axe Compute in August. Those agreements cover total capacity of 55 megawatts across multiple U.S. sites and have a contract value of more than $500 million.
On Oct. 20, 2026, Duos announced a 10-year hosting agreement to provide 20 megawatts to a publicly listed U.S. cloud services provider, with a contract value exceeding $400 million. Deployment of the capacity is expected to begin in the second quarter of 2027, placing execution and revenue tied to the agreement after the period covered by the second-quarter results. Chief Executive Doug Recker said customers are seeking scalable, energy-dense infrastructure that can be deployed quickly and efficiently. He added that the company follows a model that secures customer demand before committing significant capital to a site. At the end of the second quarter, the company’s bookings represented about $43.5 million in revenue it expected to recognize during 2026.
The company reaffirmed its guidance for revenue of more than $50 million in 2026 and deployment of 25 megawatts under contract during the year, while targeting positive adjusted EBITDA for the year. Bookings, expected revenue and announced contracts indicate the volume of work the company aims to execute, while revenue recognition depends on fulfilling orders and deploying capacity on schedule. DUOT shares closed at $6.33 on Oct. 28, 2026, up 0.16% in the session, after rising 7.85% the previous day to $6.32. The share price moves over those two sessions show a contrast between the previous session’s gains and the limited increase on Oct. 28. The agreement announced in October remains tied to an expected deployment date in the second quarter of 2027.