Duos Technologies (DUOT) - 2025 Q2 - Quarterly Results

Overview & Operational Highlights 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] - First six-month revenue reached $10.7 million, the highest in the company's history, with consecutive quarterly revenue growth of over 16%[2] - 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] - 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] - 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] Second Quarter 2025 Financial Performance 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 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] Cost of Revenue and Gross Margin 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] Operating Expenses and Net Loss 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] - 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] 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 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 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] - 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] - 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] Financial Statements 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 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 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 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 |