Summary of Duos Technologies Group Conference Call (October 21, 2025) Company Overview - **Company Name**: Duos Technologies Group (NasdaqCM: DUOT) - **Business Focus**: Transitioning from rail inspection to data center infrastructure, with a focus on modular data centers in tier three and tier four markets [2][3][22] Key Points and Arguments Business Strategy - **Expansion into Data Centers**: The company is expanding its operations into the data center infrastructure space, leveraging its existing technology and infrastructure [2][3] - **Modular Data Centers**: Introduction of micro data centers aimed at improving connectivity in underserved markets, particularly in education and healthcare sectors [8][9][12] - **Cost Model Shift**: Transitioning clients from a capital expenditure (CapEx) model to an operational expenditure (OpEx) model by providing modular data centers that reduce their upfront costs [11][12] Market Opportunities - **Target Markets**: Focus on tier three and tier four markets, starting with Amarillo, Texas, and expanding to Corpus Christi and Illinois [9][23] - **Partnerships**: Collaborating with local education sectors and healthcare providers to establish anchor tenants for the data centers [18][24] - **Carrier Collaboration**: Bringing in multiple carriers to enhance connectivity and create a "carrier hotel" effect, which locks in market share [13][22] Financial Performance - **Historical Financials**: Previous revenues fluctuated between $7 million to $15 million, largely due to the lumpy nature of the rail business [28] - **Recent Capital Raise**: Successfully raised $45 million, the largest in the company's history, to fund expansion into edge data centers [30] - **Debt-Free Status**: Currently has no debt and approximately $35 million in cash on the balance sheet [30] Future Growth Plans - **Projected Growth**: Plans to deploy 15 additional data centers by the end of the year and 45 more in the following year [22][31] - **Recurring Revenue Model**: All revenue from the Duos Edge AI subsidiary is expected to be annual recurring revenue, enhancing financial stability [42] Competitive Advantage - **Unique Technology**: Recently awarded a patent for a clean room design in modular data centers, which helps maintain equipment warranties and improves operational efficiency [20][21] - **No Direct Competition**: Currently, the company does not face direct competition in its specific modular data center model [21] Additional Important Information - **Management Team**: The management team includes experienced professionals with backgrounds in data centers and technology [27][25] - **Focus on Telecom Sector**: The company aims to build a robust network in the telecom sector, which is critical for its growth strategy [22] - **Long-Term Contracts**: Contracts are typically long-term (five years plus five-year renewals), providing a stable revenue stream [44] This summary encapsulates the key insights from the conference call, highlighting the strategic direction, market opportunities, financial outlook, and competitive advantages of Duos Technologies Group.

INVESTOR PRESENTATION OCTOBER 2025 FROM AI TO INFRASTRUCTURE: EXPANDING THE EDGE DUOS TECHNOLOGIES GROUP, INC. | NASDAQ: DUOT © 2025 - ALL RIGHTS RESERVED | Nasdaq: DUOT | This presentation, as well as other written or oral statements made from time to time, includes "forward-looking statements". Forward-looking statements are not based on historical information and include, without limitation, statements regarding our future financial condition and future results of operations, business strategy and plans ...

Core Insights - Duos Technologies Group, Inc. will present at the 19th Annual LD Micro Main Event on October 21st, highlighting its operational progress and growth in Edge Data Centers and digital infrastructure [1][4][6] - The event will provide investors with opportunities for one-on-one meetings with management to discuss financial outlook and capital strategy [1][4] Company Overview - Duos Technologies Group, Inc. is based in Jacksonville, Florida, and operates through subsidiaries focused on intelligent technology solutions for Machine Vision and AI applications [6] - The company specializes in real-time analysis of fast-moving vehicles, Edge Data Centers, and power consulting [6]

Core Insights - Duos Technologies Group, Inc. has announced the deployment of its sixth Edge Data Center (EDC) in Texas, located at Education Service Center (ESC) Region 12, aimed at enhancing digital infrastructure for education and local business growth [1][3][4] - The partnership with ESC Region 12 reflects the increasing demand for distributed computing infrastructure that supports K–12 education, workforce development, and digital transformation across Texas [3][4] - The new EDC will provide enhanced bandwidth, secure data processing, and local AI capabilities, benefiting schools and community partners in the region [3][4] Company Overview - Duos Edge AI, a subsidiary of Duos Technologies Group, focuses on deploying high-powered edge computing solutions to underserved communities, particularly in education, healthcare, and rural industries [5][6] - The company aims to establish 15 operational Edge Data Centers by 2025, utilizing a patented modular design for rapid deployment, delivering scalable compute power and high-speed connectivity within 90 days [4][6] - Each EDC is designed to provide over 100 kW per cabinet and aims to be located within 12 miles of end users, significantly closer than traditional data centers, facilitating timely data processing for real-time applications [6] Educational Impact - The deployment at ESC Region 12 is expected to support advanced learning technologies, improve administrative efficiency, and enhance community connectivity [4][6] - The EDC will directly support educators and students by providing access to real-time, reliable data processing, which is crucial for modern educational tools [4][6] - ESC Region 12 serves 77 school districts and 9 charter schools, providing professional development and technical assistance to enhance student outcomes [7]

Core Insights - Duos Technologies Group, Inc. has announced the deployment of its latest Edge Data Center (EDC) in Dumas, Texas, as part of its goal to establish 15 EDCs by the end of 2025 [1][4] - The Dumas EDC will enhance real-time data processing capabilities, supporting advanced educational tools and improved connectivity for the Dumas Independent School District (ISD) [3][4] - This initiative is part of a broader strategy to expand into underserved and high-growth markets, focusing on providing scalable IT resources closer to end users [4][6] Company Overview - Duos Edge AI, a subsidiary of Duos Technologies Group, specializes in adaptive Edge Data Center solutions designed to meet evolving needs in various environments [1][6] - The company aims to minimize latency and optimize performance by deploying high-powered edge computing solutions, ensuring reliable and secure technological access for schools and local communities [6][9] - Duos Technologies Group operates in sectors including education, healthcare, and rural industries, with a mission to bring advanced technology to underserved communities [5][9] Educational Impact - The partnership with Dumas ISD is expected to significantly strengthen the district's technology capabilities, enhancing academic excellence through improved digital infrastructure [4][8] - The EDC will serve as a localized hub for data processing, enabling better access to digital tools that drive student achievement and workforce readiness [3][4] - Dumas ISD serves approximately 4,300 students and is committed to delivering high-quality education in a supportive environment [7][8]

Core Viewpoint - Duos Technologies Group, Inc. has appointed Doug Recker as President, reflecting a strategic management transition aimed at enhancing the company's growth in Edge AI and digital infrastructure solutions [5][6]. Group 1: Leadership Appointment - Doug Recker brings over 30 years of experience in telecommunications and data centers, having previously driven Duos' expansion into Edge Data Center and colocation markets through Duos Edge AI [3][4]. - In his new role, Recker will have broader leadership responsibilities and will continue to oversee the design and deployment of Duos Edge Data Centers, enhancing connectivity for underserved communities [3][5]. Group 2: Company Strategy - The management transition is part of Duos' strategy to align leadership with customer needs and growth objectives, following a successful capital raise and a growing project pipeline [5]. - The company aims to scale its Edge AI-powered digital infrastructure ecosystem to meet the increasing demand for digital infrastructure solutions [5][6]. Group 3: Industry Recognition - Doug Recker is recognized as a pioneer in the data center industry, having founded successful companies and received multiple accolades, including the Ultimate CEO Award and recognition in Inc. 500's fastest-growing companies [4].

Core Insights - Duos Technologies Group, Inc. has appointed Brian J. James to its Board of Directors, enhancing its leadership team with a seasoned expert in the fiber and data center industries [1][5][6] - Mr. James brings over two decades of experience in building and scaling companies, particularly in supporting major technology firms with fiber and data center solutions [3][4] - His appointment is seen as a strategic move to accelerate Duos' expansion into the digital infrastructure market and to enhance its Edge AI and data center offerings [5][6] Company Overview - Duos Technologies Group, Inc. is based in Jacksonville, Florida, and operates through subsidiaries focused on intelligent technology solutions for Machine Vision and AI applications [6] - The company specializes in real-time analysis of fast-moving vehicles, Edge Data Centers, and power consulting [6] Leadership and Strategy - Brian J. James is currently the President of NAT Tech LLC and has a proven track record of transforming startups into multimillion-dollar enterprises [4] - His experience includes board roles at leading companies in fiber and edge data center deployment, which will be instrumental for Duos as it scales its portfolio [4][5] - The company aims to strengthen its leadership with industry veterans to support its long-term growth strategy across AI and digital infrastructure solutions [5]

Core Points - Duos Technologies Group, Inc. has been granted a new patent for a "Modular Data Center Entryway" designed to enhance security and protect critical equipment in Edge Data Centers [1][4] - The patented entryway features a two-door access configuration with advanced filtration to minimize dust, dirt, and moisture intrusion, providing clean-room-like protection [1][3] - The modular Edge Data Centers aim to deliver reliable, low-latency data access to underserved communities, including schools, hospitals, and first responders [3][4] Company Overview - Duos Edge AI, a subsidiary of Duos Technologies Group, focuses on deploying high-powered edge computing solutions to underserved communities, particularly in education and healthcare [5][7] - The company’s Edge Data Centers are designed for rapid deployment within 90 days and can provide over 100 kW per cabinet, positioning them closer to end users to reduce latency [5][6] - Duos Edge AI's mission includes expanding digital equity in high-growth and underserved markets by addressing environmental challenges and ensuring service uptime [4][6]

[Overview & Operational Highlights](index=1&type=section&id=Overview%20%26%20Operational%20Highlights) Duos Technologies reported a 280% year-over-year increase in quarterly revenue for Q2 2025, driven by its new energy services and edge computing businesses, achieving its highest-ever first-half revenue of **$10.7 million** - Quarterly revenue increased by **280%** year-over-year, and the company reiterates its full-year revenue guidance of **$28 million to $30 million**[1](index=1&type=chunk) - First six-month revenue reached **$10.7 million**, the highest in the company's history, with consecutive quarterly revenue growth of over **16%**[2](index=2&type=chunk) - Recorded over **$5.69 million** in Services and Consulting revenue, with **$4.76 million** stemming from the Asset Management Agreement (AMA) with New APR Energy[4](index=4&type=chunk) - The company is expanding its Edge Data Center (EDC) business, having placed orders for a total of **10 units** and aiming for **15 deployed units** by year-end[4](index=4&type=chunk) - Completed a **$40 million** public offering and raised an additional **$12.5 million** via an ATM offering to bolster its cash position for EDC expansion in 2025 and 2026[9](index=9&type=chunk) [Second Quarter 2025 Financial Performance](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Performance) In Q2 2025, total revenues surged **280%** to **$5.74 million**, primarily due to the new Asset Management Agreement (AMA) with New APR, leading to an **808%** increase in gross margin despite higher operating expenses and a slightly increased net loss Q2 2025 vs. Q2 2024 Financial Summary | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $5.74 million | $1.51 million | +280% | | Gross Margin | $1.52 million | -$0.21 million | +808% | | Operating Expenses | $4.96 million | $3.0 million | +65% | | Net Operating Loss | $3.44 million | $3.22 million | +7% | | Net Loss | $3.52 million | $3.20 million | +10% | | Net Loss Per Share | $0.30 | $0.43 | -30% | [Revenue Analysis](index=2&type=section&id=Revenue%20Analysis) Q2 2025 revenue increased **280%** to **$5.74 million**, overwhelmingly driven by the new Duos Energy segment's execution of the Asset Management Agreement (AMA) with New APR, offsetting a decrease in technology systems revenue Q2 2025 Revenue Breakdown | Revenue Source | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Technology Systems | ~$40,000 | $264,999 | | Services, Consulting & Hosting | ~$5.7 million | $1,245,497 | | **Total Revenue** | **$5.74 million** | **$1.51 million** | - The significant revenue increase was primarily driven by Duos Energy's execution of the AMA with New APR, which involves managing a fleet of mobile gas turbines[6](index=6&type=chunk) [Cost of Revenue and Gross Margin](index=2&type=section&id=Cost%20of%20Revenue%20and%20Gross%20Margin) Cost of revenues for Q2 2025 rose **144%** to **$4.22 million**, but gross margin dramatically improved by **808%** to **$1.52 million**, significantly boosted by **100%**-margin revenue from an equity interest Q2 Gross Margin Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Cost of Revenues | $4.22 million | $1.73 million | +144% | | Gross Margin | $1.52 million | -$0.21 million | +808% | - Gross margin improvement was primarily due to the AMA, including **$904,125** in revenue from an equity interest in New APR's parent, which carried no associated costs[8](index=8&type=chunk) [Operating Expenses and Net Loss](index=3&type=section&id=Operating%20Expenses%20and%20Net%20Loss) Operating expenses in Q2 2025 increased by **65%** to **$4.96 million**, largely due to non-cash stock-based compensation and one-time bonuses, contributing to a **10%** rise in net loss to **$3.52 million** - The increase in operating expenses is largely attributed to non-cash stock-based compensation and one-time commission/bonus expenses of approximately **$1.0 million**[10](index=10&type=chunk) - Net loss increased by **10%** to **$3.52 million**, or **$0.30 per share**, compared to a loss of **$3.20 million**, or **$0.43 per share**, in Q2 2024[12](index=12&type=chunk) [Liquidity](index=3&type=section&id=Liquidity) As of June 30, 2025, the company held **$1.47 million** in cash and cash equivalents, with total short-term liquidity of approximately **$3.81 million**, a decrease from the end of 2024 Liquidity Position (June 30, 2025) | Item | Amount | | :--- | :--- | | Cash and cash equivalents | $1.47 million | | Receivables and contract assets | $2.34 million | | **Total short-term liquidity** | **~$3.81 million** | [Six Month 2025 Financial Performance](index=3&type=section&id=Six%20Month%202025%20Financial%20Performance) For the first six months of 2025, Duos Technologies reported a **314%** revenue increase to **$10.69 million**, with gross margin improving dramatically by **2,462%** to **$2.83 million**, leading to a **6%** reduction in net loss despite higher operating expenses Six Month 2025 vs. 2024 Financial Summary | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $10.69 million | $2.58 million | +314% | | Gross Margin | $2.83 million | -$0.12 million | +2,462% | | Operating Expenses | $8.06 million | $5.86 million | +38% | | Net Operating Loss | $5.23 million | $5.98 million | -13% | | Net Loss | $5.60 million | $5.96 million | -6% | | Net Loss Per Share | $0.48 | $0.81 | -41% | [Financial Outlook and Management Commentary](index=4&type=section&id=Financial%20Outlook%20and%20Management%20Commentary) The company reiterates its full-year 2025 revenue guidance of **$28 million to $30 million**, supported by a **$40.7 million** backlog, with CEO Chuck Ferry anticipating the first breakeven or profitable quarter soon - The company reiterates its 2025 full-year revenue guidance to be between **$28 million and $30 million**[21](index=21&type=chunk) - At the end of Q2, the company had a revenue backlog of approximately **$40.7 million**, with about **$18 million** expected to be recognized during the remainder of 2025[20](index=20&type=chunk) - CEO Chuck Ferry anticipates the company will record its first quarter of breakeven or better in its history during the second half of the year[22](index=22&type=chunk) [Financial Statements](index=7&type=section&id=Financial%20Statements) The unaudited consolidated financial statements provide detailed financial data for Duos Technologies Group, Inc. and its subsidiaries, including Statements of Operations, Balance Sheets, and Statements of Cash Flows for periods ended June 30, 2025 [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) The Consolidated Statements of Operations detail the company's revenues, costs, and expenses for the three and six-month periods ending June 30, 2025, showing significant revenue growth and improved gross margin, though net loss persisted Q2 2025 Statement of Operations Highlights (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $5,736 | $1,510 | | Gross Margin | $1,519 | $(215) | | Loss from Operations | $(3,441) | $(3,216) | | Net Loss | $(3,518) | $(3,204) | Six Months 2025 Statement of Operations Highlights (in thousands) | Line Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Total Revenues | $10,688 | $2,581 | | Gross Margin | $2,833 | $(120) | | Loss from Operations | $(5,230) | $(5,977) | | Net Loss | $(5,598) | $(5,956) | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheet as of June 30, 2025, shows total assets of **$31.1 million** and total liabilities of **$26.4 million**, with cash decreasing and stockholders' equity increasing compared to December 31, 2024 Balance Sheet Summary (June 30, 2025 vs. Dec 31, 2024) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash | $1,474,395 | $6,266,296 | | Total Current Assets | $4,775,920 | $8,087,205 | | Total Assets | $31,133,636 | $34,958,677 | | Total Current Liabilities | $13,072,411 | $16,089,566 | | Total Liabilities | $26,400,989 | $32,697,346 | | Total Stockholders' Equity | $4,732,647 | $2,261,331 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, the company used **$7.9 million** in cash from operating activities, with net cash provided by financing activities of **$4.5 million**, resulting in a net decrease in cash of **$4.8 million** Six Month Cash Flow Summary (H1 2025 vs H1 2024) | Cash Flow Activity | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(7,875,737) | $(3,940,984) | | Net cash used in investing activities | $(1,388,041) | $(889,285) | | Net cash provided by financing activities | $4,471,877 | $2,894,541 | | **Net decrease in cash** | **$(4,791,901)** | **$(1,935,728)** | | **Cash, end of period** | **$1,474,395** | **$506,114** |

Financial Data and Key Metrics Changes - Total revenues for Q2 2025 increased 280% to $5,740,000 compared to $1,510,000 in Q2 2024 [9] - For the six months ended 2025, total revenues increased 314% to $10,690,000 from $2,580,000 in the same period last year [9] - Gross margin for Q2 2025 increased 808% to $1,520,000 compared to negative $215,000 for Q2 2024 [11] - Net loss for Q2 2025 totaled $3,520,000 compared to a net loss of $3,200,000 for Q2 2024, a 10% increase attributed to noncash stock-based compensation [15] Business Line Data and Key Metrics Changes - The asset management agreement (AMA) with APR Energy has stabilized financials, contributing approximately $5,690,000 in recurring services and consulting revenue in Q2 2025 [9][10] - The railcar inspection portal business has remained flat, but is expected to see broader usage in the coming years [3] - Operating expenses for Q2 2025 increased 65% to $4,960,000 compared to $3,000,000 for Q2 2024, largely due to noncash stock-based compensation [12] Market Data and Key Metrics Changes - The company has successfully installed and delivered a 150 megawatt gas turbine power plant in Mexico in 35 days, indicating strong operational capabilities [2] - The edge data center business is gaining momentum, with plans to install 15 edge data centers in Texas this year [2] Company Strategy and Development Direction - The company is pivoting to the edge data center business, with a growing pipeline of opportunities for 2026 [2] - The management team has identified the need to diversify into at least two distinct businesses to achieve significant growth and profitability [5] - The company expects to achieve breakeven to profitability by Q4 2025 [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the guidance issued for the year, citing improved financial conditions compared to the previous year [3] - The company anticipates continued revenue growth in the next two quarters, driven by the execution of the AMA and the deployment of edge data centers [8] - Management highlighted the overwhelming demand for behind-the-meter power solutions for large U.S.-based data center operators [22] Other Important Information - The company raised over $50,000,000 in capital, significantly improving its balance sheet and allowing for expansion into new markets [7] - Current contracts in backlog represent more than $40,000,000 in revenue, with approximately $12,300,000 projected to be recognized in 2025 [18] Q&A Session Summary Question: What is the fully diluted share count? - The fully diluted share count is currently 25,000,000 shares [27] Question: Can you provide insight on noncash stock-based compensation? - Noncash compensation is roughly about $1,000,000 a quarter [30] Question: Will the company consider posting non-GAAP earnings numbers? - The company will consider using non-GAAP financials in the future [31] Question: What is the expected revenue per unit for the edge data centers? - Each edge data center is expected to earn around $300,000 to $500,000 annually once fully operational [37] Question: What is the timeline for cash flow from the edge data centers? - It takes about 90 days to manufacture and deliver an edge data center, followed by approximately two weeks for installation [48] Question: What is the gross profit margin once the edge data centers are operational? - The targeted gross profit margin is in the mid-70s, with EBITDA targeted just above 50% [53]