JACKSONVILLE, Fla., Nov. 12, 2025 (GLOBE NEWSWIRE) -- Duos Technologies Group, Inc. ("Duos" or the "Company") (Nasdaq: DUOT), a provider of adaptive, versatile and streamlined Edge Data Center ("EDC") solutions and operational services for the deployment of "behind the meter" electrical power, reported financial results for the third quarter ("Q3 2025") ended September 30, 2025. In addition to the equivalent quarter revenue growth, consecutive quarterly revenue growth was more than 20% for a total of $17.6 million for the first nine months, the highest revenue for that period in the Company's history.
Third Quarter 2025 and Recent Operational Highlights
-- Recorded $6.88 million in revenue, including $6.59 million for services
of which $5.15 million is related to the Asset Management Agreement
("AMA") with New APR Energy.
-- Recorded $17.6 million for the first nine months, representing the
highest revenue in the Company's history.
-- Improved Gross Margins compared to the same quarter one year ago.
-- Raised more than $50 million to capitalize its growth in the data center
market and retired all debt.
-- Signed partnership with FiberLight to expand its coverage with telecom
and carrier footprint, further accelerate deployment of Edge Data Centers
and expand high-speed connectivity across underserved U.S. markets.
-- Announced the deployment of its sixth Edge Data Center with an additional
nine data centers scheduled for Q4 to include the first out-of-state
deployment in Illinois.
-- Awarded U.S. Patent No. 12,404,690 B1 for its Entryway for a Modular Data
Center, an innovation that positions Duos as a differentiated provider in
the growing digital infrastructure market.
-- Appointed Doug Recker as President and Corporate Officer for Duos
Technologies Group.
-- Appointed entrepreneur and successful business executive Brian James to
the Board of Directors reinforcing Duos' strategic alignment and
execution capability as the Company enters its next phase of growth.
-- Joined the Nomad Futurist Foundation as an Inspiration Sponsor,
strengthening its role in advancing awareness, education, and talent
development within the digital-infrastructure ecosystem.
Third Quarter 2025 Financial Results
It should be noted that the following Financial Results represent the consolidation of the Company with its subsidiaries Duos Technologies, Duos Edge AI, Inc., and Duos Energy Corporation ("Duos Energy").
Total revenues for Q3 2025 increased 112% to $6.9 million compared to $3.2 million in the third quarter of 2024 ("Q3 2024"). Total revenue for Q3 2025 represents an aggregate of approximately $263,000 of technology systems revenue and approximately $6,600,000 in recurring services and consulting and hosting revenue. The significant revenue increase in the third quarter, compared to the same quarter last year, was primarily driven by Duos Energy executing against the Asset Management Agreement ("AMA") with New APR that was signed on December 31, 2024. Under the AMA, Duos Energy oversees the deployment and operations of a fleet of mobile gas turbines and related balance-of-plant inventory, providing management, sales, and operational support services to New APR. Other revenue sources included the start of hosting revenues for its edge data centers and limited progress of two Railcar Inspection Portals ("RIP$(R)$ ") currently being developed for Amtrak.
Cost of revenues for Q3 2025 increased 88% to $4.36 million compared to $2.32 million for Q3 2024. The significant increase in cost of revenues was primarily due to supporting the AMA with New APR, where Duos Energy oversees the deployment and operations of a fleet of mobile gas turbines and related balance-of-plant inventory, providing management, sales, and operational support services to New APR. The cost of revenues on technology systems decreased compared to the equivalent period in 2024. This reduction is primarily driven by our ability in Q3 2025 to reallocate certain fixed operating and servicing costs for technology systems to support the AMA, an allocation we could not make in the comparative period because the agreement was not yet in effect. It also reflects the limited manufacturing progress ahead of field installation of our two high-speed RIP(R) s while we await customer readiness for site deployment.
Gross margin for Q3 2025 increased 174% to $2.5 million compared to $0.9 million for Q3 2024. Gross margin improved primarily due to Duos Energy's performance of the AMA with New APR. This also includes $904,125 in revenue recognized during the three months ended September 30, 2025, related to the Company's 5% non-voting equity interest in the ultimate parent of New APR, which carries no associated costs and therefore contributes at a 100% margin. These revenues and the associated margin contribution were not present in the prior year period.
Operating expenses for Q3 2025 increased 28% to $3.6 million compared to $2.8 million for Q3 2024. The increase in expenses is largely attributed to non-cash stock-based compensation charged for restricted stock granted to the executive team on January 1, 2025, under new employment agreements with a three-year cliff vesting schedule. Overall, sales and marketing costs declined as resources were allocated to costs of service and consulting revenues in support of the AMA with New APR. Additionally, research and development expenses fell by 71% owing to scaled-back testing of prospective technologies. The Company continues to focus on stabilizing operating expenses, including evaluating reductions in some areas, while continuing to meet the increased requirements of our new businesses.
Net operating loss for Q3 2025 totaled $1.1 million compared to net operating loss of $1.9 million for Q3 2024. The decrease in loss from operations was primarily the result of increased revenues during the quarter, driven by revenue generated by Duos Energy through the AMA with New APR, offset slightly by non-cash stock-based compensation charged for restricted stock that was not in the comparative period.
Net loss for Q3 2025 totaled $1.04 million compared to net loss of $1.4 million for Q3 2024. The 26% decrease in net loss was mostly attributed to the non-cash stock-based compensation charged for restricted stock and one-time compensation expenses that were not in the comparative period, offset by an increase in revenues generated by Duos Energy through the AMA with New APR as described above. Net loss per common share was $0.06 and $0.18 for the three months ended September 30, 2025 and 2024, respectively.
Cash and cash equivalents at September 30, 2025 totaled $33.20 million compared to $6.27 million at December 31, 2024. In addition, the Company had over $3.00 million in receivables and contract assets for a total of approximately $36.20 million in cash and expected short-term liquidity.
Nine Month 2025 Financial Results
Total revenue increased 202% to $17.6 million from $5.8 million in the same period last year. Total revenue for the first nine months of 2025 represents an aggregate of approximately $370,000 of technology systems revenue and approximately $17.2 million in recurring services and consulting revenue. The significant revenue increase in the period, compared to the same period last year, was primarily driven by Duos Energy executing against the AMA with New APR originally signed on December 31, 2024. The decrease in technology systems' revenues was primarily attributed to delays outside of the Company's control with deployment of our two high-speed Railcar Inspection Portals. Although these systems remain largely ready for deployment, customer delays at the deployment site continue to prevent the Company from entering the installation phase although this is now expected to be mitigated in the last quarter of 2025. In spite of the timing delays that continue to impact the quarterly results, management remains confident in the long-term potential of the RIP(R) product.
Cost of revenues increased 143% to $12.2 million from $5.0 million in the same period last year. The significant increase in cost of revenues was primarily due to supporting the AMA with New APR, where Duos Energy oversees the deployment and operations of a fleet of mobile gas turbines and related balance-of-plant inventory, providing management, sales, and operational support services to New APR. The cost of revenues on technology systems decreased compared to the equivalent period in 2024. This reduction is primarily driven by our ability in the period to reallocate certain fixed operating and servicing costs for technology systems to support the AMA, an allocation we could not make in the comparative period because the agreement was not yet in effect. It also reflects the ramp-down of manufacturing ahead of field installation of our two high-speed RIP(R) s, which have continued to temporarily slow project activity and further reduce cost of revenues while we await customer readiness for site deployment.
Gross margin increased 569% to $5.4 million from $800,00 in the same period last year. Gross margin improved primarily due to Duos Energy's performance of the AMA with New APR. This includes $2,712,375 in revenue recognized during the period, related to the Company's 5% non-voting equity interest in the ultimate parent of New APR, which carried no associated costs and therefore contributed at a 100% margin. These revenues and the associated margin contribution were not present in the prior year period.
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