Duos Technologies (DUOT) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenues for Q1 2025 increased 363% to $4,950,000 compared to $1,070,000 in Q1 2024 [11] - Gross margin for Q1 2025 increased 1288% to $1,310,000 compared to $90,000 for Q1 2024 [13] - Net loss for Q1 2025 totaled $2,080,000 compared to a net loss of $2,750,000 for Q1 2024, representing a 24% decrease in net loss [15] Business Line Data and Key Metrics Changes - The power line of business contracted 570 megawatts with APR Energy's gas turbine fleet, an increase of 180 megawatts since the last report [3] - The edge data center business, DuosEdge AI, has customer commitments for an additional eight edge data centers, expecting to complete installations in the next six months [4][8] - Revenues from the asset management agreement (AMA) with APR Energy are expected to positively impact gross margins [11] Market Data and Key Metrics Changes - Current contracts and backlog represent more than $45,000,000 in revenue, with approximately $17,400,000 projected to be recognized in Q2 2025 [18] - The company expects to enter 2026 with more than $3,000,000 in annual recurring revenue from multi-year contracts [9] Company Strategy and Development Direction - The company is focused on executing its strategy to grow into a larger entity through three distinct divisions: Duos Technologies, DuosEdge AI, and DuosEnergy [6] - The edge AI division is actively marketing remote data centers to serve local communities and businesses, with plans to deploy 15 edge data centers by the end of the year [7][8] - The company is evaluating opportunities to acquire additional assets to grow the overall value of APR Energy [46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of the power business and the edge data center market, noting that both lines of business are currently performing well [34][36] - The company anticipates breakeven or potential profitability in the third and fourth quarters, with a focus on minimizing losses in the first half of the year [19] Other Important Information - The company has improved its balance sheet, with shareholders' equity now over $5,100,000 and cash of $6,480,000 [16] - The company has retired $1,000,000 of debt during the quarter and expects to retire an additional $1,200,000 by year-end [17] Q&A Session Summary Question: What is the expected gross margin for the power business throughout the year? - Management indicated that a gross margin of around 32% is a good range to expect for the year, with opportunities to improve [26][27] Question: Any updates on hyperscaler opportunities in the data center business? - Management confirmed active discussions with three or four hyperscalers interested in utilizing edge data centers and behind-the-meter power solutions [28][29] Question: Has there been any change in the sales cycle due to tariffs? - Management reported no significant impact from tariffs on the power or edge data center businesses, stating that both lines are performing well [33][34] Question: How does the company plan to allocate resources for new projects? - Management noted that they are maintaining a high utilization rate of their assets and are evaluating opportunities for additional acquisitions to support growth [45][46]