Duos Technologies Group Q1 2025 Earnings Report

Duos Technologies Group EPS Results

• Actual EPS: -$0.18
• Consensus EPS: -$0.18
• Beat/Miss: Met Expectations
• One Year Ago EPS: -$0.38

Duos Technologies Group Revenue Results

• Actual Revenue: $4.95 million
• Expected Revenue: $4.60 million
• Beat/Miss: Beat by +$352.00 thousand
• YoY Revenue Growth: N/A

Duos Technologies Group Announcement Details

• Quarter: Q1 2025
• Date: 5/15/2025
• Time: After Market Closes
• Conference Call Date: Thursday, May 15, 2025
• Conference Call Time: 4:30PM ET

Duos Technologies Group (NASDAQ:DUOT) designs, develops, deploys, and operates intelligent technology solutions in North America. The company provides solutions, such as Centraco, an enterprise information management software platform that consolidates data and events from multiple sources into a unified and distributive user interface; and truevue360, an integrated platform to develop and deploy artificial intelligence algorithms, including machine learning, computer vision, object detection, and deep neural network-based processing for real-time applications. Its proprietary applications include Railcar Inspection Portal that provides freight and transit railroad customers and select government agencies the ability to conduct fully automated railcar inspections of trains while they are moving at full speed. It also develops Automated Logistics Information System, which automates gatehouse operations, as well as develops solutions for rail, trucking, aviation, and other vehicle-based processes. In addition, the company provides consulting services, including consulting and auditing; software licensing with optional hardware sales; customer service training; and maintenance support. The company operates its services under the duostech brand. The company is headquartered in Jacksonville, Florida.

Duos Technologies Group Q1 2025 Earnings Call Transcript

Key Takeaways

• Through the APR Energy asset management agreement, Duos has contracted 570 MW of gas turbines—an increase of 180 MW in six weeks—and expects to reach 730 MW within two weeks for deployment in the US and Mexico.
• The DuosEdge AI division has secured commitments for nine additional edge data centers, building on the pilot in Amarillo, and remains on track to deploy 15 edge data centers by year-end.
• First-quarter revenues rose 363% year-over-year to $4.95 million, driven by approximately $3.9 million from recurring services under the APR AMA, while gross margin increased over 1,200%.
• Current contracts and backlog total over $45 million, with $17.4 million expected in 2025 and full-year revenue guidance maintained at $28–30 million.
• Duos ended the quarter with $6.48 million in cash, retired $1 million of debt in Q1 (with $1.2 million more targeted this year), and holds a 5% equity stake valued at over $7.2 million in APR Energy’s parent.

Presentation

[Operator]

Good afternoon. Welcome to Duos Technologies First Quarter twenty twenty five Earnings Conference Call. Joining us today's call are Duos' CEO, Chuck Ferry and CFO, Adrian Goldfarb. Following their remarks, we will open the call for your questions. Then before we conclude today's call, I'll provide the necessary cautions regarding the forward looking statements made by management during this call.

[Operator]

Now I'd like to turn the call over to Duo's CEO, Chuck Berry. Please go ahead, sir.

[Charles Ferry, CEO & Director at Duos Technologies Group]

Welcome, everyone, and thank you for joining us. Earlier today, we issued our earnings press release and our 10 Q for the first quarter of twenty twenty five. Copies are available in the Investor Relations section of our website.

[Charles Ferry, CEO & Director at Duos Technologies Group]

I encourage all listeners to view the press releases and our tenancy filings to better understand some of the details we'll be discussing during today's call. Since our last earnings call in March, only six weeks ago, we've made significant progress, particularly in our power and edge data center lines of business. Let's first talk about our power line of business. Through our asset management agreement with APR Energy, we have now successfully contracted 570 megawatts with the APR Energy's gas turbine fleet, which is an increase of 180 megawatts since our last report six weeks ago. I expect the contract to close on an additional 160 megawatts in the coming two weeks.

[Charles Ferry, CEO & Director at Duos Technologies Group]

Altogether, this means we will have approximately 730 megawatts of gas turbines contracted in just five months for entering into our asset management agreement with APR Energy and Fortress Investment Group. These assets will be deployed across multiple projects in The United States and Mexico in the coming three months. With our edge data center business called DuosEdge AI, we have previously reported contracting our first edge data center in Amarillo, Texas in support of school district sixteen. We now have customer commitment for an additional eight edge data centers and expect to complete these installation in the coming six months. We remain confident in our plan to place 15 edge data centers by the end of this year.

[Charles Ferry, CEO & Director at Duos Technologies Group]

Overall, we are on track to execute our strategy and meet the guidance that we have previously issued. With that, I'll turn it over to Adrian Goldfarb to our CFO to get further into the financial review.

[Adrian Goldfarb, CFO at Duos Technologies Group]

Thank you, Chuck. Before covering the specific results for the first quarter, I will make some brief introductory remarks discussing the progress that has been made during this quarter. I will also discuss some of the additional disclosure we are making in our 10 Q related to recording our financials given that we are now operating in three distinct segments.

[Adrian Goldfarb, CFO at Duos Technologies Group]

It is important to understand that while the results being presented are significantly improved compared to a year ago, this is just the beginning of a wholesale transformation for Duos. As a reminder, we now record financials for three separate divisions. Duos Technologies, which in the last few years has focused on the rail industry, DuosEdge dot ai, a wholly owned subsidiary which was started last summer with the objective of moving into the edge data center market with a product that is a spin off from our railcar inspection portal. And DuosEnergy, also created last summer as a vehicle for us to supply services to the behind the meter power business. Duos Energy now serves as a vehicle for supporting our asset management agreement or AMA with new ATR.

[Adrian Goldfarb, CFO at Duos Technologies Group]

Each division has a distinct role and objectives with the goal of growing Duos to becoming a much larger entity. While we have not had the success we hoped for in the rail industry, we have been successful in building some world class technologies, and the reaction is universally positive to what can be accomplished. Despite the slow adoption of the rail industry, a lot of work continues with our key customers, and we also plan to roll out some new products later this year, both in software and hardware. Our edge AI division has been extremely active in marketing the concept of a remote but highly capable data center to serve local communities and businesses. As a reminder, the offering behind this business was an outgrowth of development work done at Duo Technologies, and our pilot rollout in Amarillo earlier this year was attended by over a 50 staff and executives representing industry, government, and media.

[Adrian Goldfarb, CFO at Duos Technologies Group]

This event generated significant interest such that, as discussed in our press release this morning, we have solidified our financial arrangements with AccuTech, a supply of edge data centers built to our specification. As Chuck mentioned, we have identified locations for at least nine EDCs with excellent prospects for an additional six units, and we expect to achieve our 15 units deployed targets by year end. We will begin recording revenues from these units starting in q two and building throughout 02/2025. We expect to enter 2026 with more than $3,000,000 in annual recurring revenue on multiyear contracts. Our asset management agreement with new APR Energy is off to a faster.

[Adrian Goldfarb, CFO at Duos Technologies Group]

We recorded almost $4,000,000 in revenues in the quarter, and I expect that number to grow steadily over the next three quarters, meeting the guidance previously issued. Finally, as I initially discussed in this report and going forward, we will provide additional information pertaining to the performance of the individual businesses. For example, we now report the results from the AMA as a separate line item on the p and l for both revenue and cost of goods sold. In the future, we will also report on the impact of certain material items such as our equity ownership in UAPR. And now let me give a summary of our results for the first quarter.

[Adrian Goldfarb, CFO at Duos Technologies Group]

Total revenues for Q1 twenty twenty five increased 363% to $4,950,000 compared to $1,070,000 in the first quarter of twenty twenty four. The substantial majority of our revenue for Q1 twenty twenty five was approximately $4,900,000 in recurring services and consulting revenue, of which $3,900,000 was primarily driven by execute against the asset management agreement with new APR. As a reminder, under the AMA, Duos Energy oversees the deployment and operations of a fleet of mobile gas turbines and related balance plant inventory, providing management, sales, and operational support services to New APR. As New APR continues to grow its business and as Chuck has discussed, Duos revenues from this segment are expected to have a positive impact on gross margin that I will discuss momentarily. Cost of revenues for q one twenty twenty five increased 273% to 3,640,000.00 compared to 980,000.00 for q one twenty twenty four.

[Adrian Goldfarb, CFO at Duos Technologies Group]

The significant increase in cost of revenues was primarily due to supporting the AMA with new APR, which is now listed as a separate item in the amount of $2,660,000. An additional contributing factor to the increase in cost of revenues on services and consulting is approximately 548,000 in amortization expense of the intangible asset accounted for as a nonmanitory transaction related to our RIPS subscription business, which was not present in the corresponding period of 2024. Overall, the cost of revenues on technology systems decreased compared to the equivalent period in 2024. This reduction is primarily driven by our ability in q one twenty twenty five 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 railcar inspection portals, which has been delayed due to circumstances out of our control, temporarily slowing project activity and further reducing cost of revenues while we await customer readiness for site deployment.

[Adrian Goldfarb, CFO at Duos Technologies Group]

Gross margin for q one twenty twenty five increased 1288% to $1,310,000 compared to 90,000 for q one twenty twenty four. Gross margin improved primarily due to US Energy beginning performance of the AMA with new APR. This includes over $900,000 in revenue recognized during the three months ended 03/31/2025 related to the company's 5% nonvoting equity interest in the ultimate parent of UAPR, 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. As I mentioned earlier, the increase in business from the AMA is expected to improve gross margins on this segment due to the greater profitability for Duos on certain aspects of the work it will perform on behalf of UAPR.

[Adrian Goldfarb, CFO at Duos Technologies Group]

Operating expenses for Q1 twenty twenty five increased 9% to $3,100,000 compared to $2,860,000 for Q1 twenty twenty four. The increase in expenses is largely attributed to noncash stock based compensation charge for restricted stock granted to the executive team on 01/01/2025 under new employment agreements with a three year cliff vesting schedule. Sales and marketing costs declined as resources were allocated to cost of service and consulting revenues in support of the AMA with new APR. Conversely, research and development expenses rose 11%, reflecting new engineering effort to develop new and enhanced product offerings that I previously mentioned. The company continues to focus on stabilizing operating expenses while meeting the increased needs of our customers.

[Adrian Goldfarb, CFO at Duos Technologies Group]

Net operating loss for q one twenty twenty five totaled $1,790,000 compared to a net operating loss of 2,760,000.00 for q one twenty twenty four. The decrease in loss from operations was primarily the result of increased revenues during the quarter driven by revenue generated by Duarte Energy through the AMA with new APR. Net loss for q one twenty twenty five totaled 2,080,000.00 compared to a net loss of 2,750,000.00 for q one twenty twenty four. '20 '4 percent decrease in net loss was mostly attributed to the increase in revenues generated by Duos Energy through the AMA with new APR as described above. There was also approximately 322,000 of interest paid during the quarter, which was not present in the equivalent quarter one year ago.

[Adrian Goldfarb, CFO at Duos Technologies Group]

In our last call, I highlighted the substantial improvement in the company's balance sheet as of twelvethirty onetwenty twenty four. In the first quarter, we have largely maintained that strength and also improved in some areas, notably shareholders' equity, which now stands at over $5,100,000 We ended the quarter with $6,480,000 in cash and expected short term liquidity. As previously discussed, a significant asset for Duis is the equity investment in Storebrand's APR Holdings, the ultimate parent of new APR Energy. Our 5% equity holding in this business is currently valued at over $7,200,000 and is expected to generate profits in future years as a profit interest structure. As Chuck will discuss, the tremendous progress that UAPR is making will be additive in the short term through the AMA and in the longer term through the expected increase in valuation of our equity holdings.

[Adrian Goldfarb, CFO at Duos Technologies Group]

All of this is positive for Duo's future potential, and I look forward to updating you further in our earnings calls later this year. On the liability side, the company has traditionally operated with little to no debt other than some minor financing contracts related to insurance or IT equipment. As a reminder, in 02/2024, we received $2,200,000 in debt funding for our initial three EDCs, and we're able to secure that for around 10% cost of capital, which is an attractive rate for a company of our size. We also secured additional financing for a further three EDCs in the form of a master capital lease with a similar cost of capital and flexible payment terms as we deployed these assets in preparation for the associated cash flows. I'm pleased to announce that during the quarter, we have retired $1,000,000 of this debt and expect to retire a further $1,200,000 by the end of this year, keeping our leverage ratios within reasonable limits.

[Adrian Goldfarb, CFO at Duos Technologies Group]

Next, I would like to update you on our backlog and pipeline. With expected revenues for the management and operations of new APR Energy, expected deployments over our edge data centers, and current and anticipated contracts in our rail business, our current contracts and backlog represent more than $45,000,000 in revenue with approximately $17,400,000 or more of that projected to be recognized in 02/2025, plus a further $7,000,000 to $8,000,000 in expected near term awards and renewals. During the last call, we reinstituted guidance, and we are maintaining that guidance where we expect to record between twenty eight and thirty million dollars in consolidated revenue from our three subsidiaries. While we do not normally give quarterly guidance, our performance in q one was at the upper end of the projected range of 4 to $5,000,000, and I expect a similar performance in q two. With respect to our previously stated expectations to lose some money in the first half as we transition and build new businesses, we are reiterating this projection to plan to minimize this as much as possible by some expense reductions, which will be somewhat offset by an anticipated increase in onetime expenses related to deferred compensation.

[Adrian Goldfarb, CFO at Duos Technologies Group]

However, as previously stated, we continue to expect to breakeven and may make money in the third and fourth quarters and end the full year with positive adjusted EBITDA, the major adjustment being for noncash stock compensation. This concludes my formal remarks. And at this point, I will turn the call back to Chuck for his commentary. Chuck?

[Charles Ferry, CEO & Director at Duos Technologies Group]

Thank you, Adrian.

[Charles Ferry, CEO & Director at Duos Technologies Group]

As you can see from Adrian's commentary, the business has made good progress since the beginning of the year. Let me add some additional details to my opening remarks. With our asset management agreement supporting APR Energy, closing commercial contracts in both the data center space and traditional fast power jobs has gone at a lightning pace. As I said earlier, we have five seventy megawatts in contract now, and expect that to increase to seven thirty megawatts in the next two weeks. As a reminder, through the asset management agreement, we operate approximately eight fifty megawatts of power generation along with balance of plant where we provide turnkey power plants normally installed within thirty to ninety days depending on the situation.

[Charles Ferry, CEO & Director at Duos Technologies Group]

Currently, we have two projects here in The United States fully installed and operating. One of them is with a large data center operating as part of a behind the meter solution. In progress, currently, are two more installations. The first is with another US data center operating a behind the meter solution, and the second is a traditional fast power project in Mexico. We are expecting a third project that will provide a fast power solution for another US customer who has an immediate need.

[Charles Ferry, CEO & Director at Duos Technologies Group]

I expect all projects to be online producing electricity in the next ninety days or so. Simultaneously, we are in discussions with multiple US Data Center Developers for longer term behind the meter power solutions. Our staff is also assisting APR Energy in evaluating follow on asset acquisitions to expand the fleet. The positive effect for Duos is a solid source of revenues through the asset management agreement and growing the value of our 5% equity stake in APR Energy's parent. With the Reg's data center business, Doug Recker and his team have also made best progress since our last earnings call.

[Charles Ferry, CEO & Director at Duos Technologies Group]

As I said earlier, we now have customer commitments for an additional eight edge data centers and are working to complete contracts and coordinate installations that are planned over the next six months. These include two edge data centers in Tampa, Texas, 1 edge data center in Dumas, Texas, 1 edge data center in Victoria, Texas, 2 edge data centers in Lubbock, Texas, and finally, second edge data center in Amarillo, Texas for a new customer not related to Region 16. We have also recently placed a procurement order for four additional new edge data centers necessary to support our pipeline. This would put the total number of edge data centers owned at 10. Adrian, Doug, and I remain confident in our plan to place 15 edge data centers by the end of this year.

[Charles Ferry, CEO & Director at Duos Technologies Group]

A special thanks to our partner, AccuTech, who has been super supportive of our deployment strategy. I also wanna give my highest compliments in regards to the Duo's leaders and staff. As you can tell, we are executing a number of simultaneous projects. We currently have our teams deployed in multiple locations, and they are working very hard to execute installations that include railcar inspection portals for Amtrak, as data centers for our Texas based customers, and fast power plants for our data center and traditional power customers. As always, I wanna thank our business partners, board of directors, and our shareholders for their continued support.

[Charles Ferry, CEO & Director at Duos Technologies Group]

The outlook for Duos looks very promising right now, and I'm excited to be able to lead. Thank you for listening, and now we'll open the call for your questions. Operator, please provide the appropriate instructions.

[Operator]

Thank you. And our first question comes from the line of Michael Latimore with Northland Capital Markets. Please proceed.

[Mike Latimore, Managing Director & Senior Research Analyst at Northland Capital Markets]

Alright. Great. Thank you. Yeah.

[Mike Latimore, Managing Director & Senior Research Analyst at Northland Capital Markets]

Looks looks like an awesome start to the year here. In terms of the power business, looks like gross margin was around 32%. Is that kind of a good range to think about throughout this year?

[Charles Ferry, CEO & Director at Duos Technologies Group]

Yeah. It it is taking a sense.

[Charles Ferry, CEO & Director at Duos Technologies Group]

Yes. Yeah. So on the on the power business, we feel very confident in the forecast that we put together for the year on that. And, yeah, so that's a that's a good number to think about for our gross margin. Obviously, as we go through the year, we're gonna try to improve that, and there'll be some opportunities, I think, to try to do that.

[Mike Latimore, Managing Director & Senior Research Analyst at Northland Capital Markets]

Got it. And looks like you're you've got really good visibility on the data center business. You know, in the past, you've sort of talked a little bit about maybe some hyperscaler opportunities. Can you give any up update on on that?

[Charles Ferry, CEO & Director at Duos Technologies Group]

Yeah.

[Charles Ferry, CEO & Director at Duos Technologies Group]

So, you know, one of the things that really kinda flipped the switch on that was we we you know, it was in in the press, of course, was the First Edge data center we put into Amarillo and support Region 16, and that really attracted a lot of attention from a lot of these other customers down down in the state of Texas and all and also outside of Texas. But so so that really kind of spurred that on. It also attracted the attention of a couple of of different I don't I I would prefer not to disclose their names at this time, but we are in active discussions with probably about three or four hyper scalers that are interested in putting their product, if you will, or their computing power into these edge data centers, in support of these, these smaller markets. And then also, interested in behind the meter power, as they're developing a larger data center part.

[Charles Ferry, CEO & Director at Duos Technologies Group]

So it's kind of a it's kind of a win win for for both those lines of business.

[Mike Latimore, Managing Director & Senior Research Analyst at Northland Capital Markets]

Excellent. Excellent. And I guess just two clarification questions. Adrian, did you say you expect two q to be similar to one q in terms of revenue?

[Adrian Goldfarb, CFO at Duos Technologies Group]

Yes. Yes. You know, we as I said, we don't normally give quarterly guidance, but I am expecting that q two will be similar to to q one.

[Mike Latimore, Managing Director & Senior Research Analyst at Northland Capital Markets]

Alright. And then what just last one for me.

[Mike Latimore, Managing Director & Senior Research Analyst at Northland Capital Markets]

What what what should we have stock comp and depreciation before the second quarter end year? Just trying to back in an EBITDA number here.

[Adrian Goldfarb, CFO at Duos Technologies Group]

Yes. So the so the stock comp is running at about it's about 5 or 600,000 a quarter. Mhmm.

[Adrian Goldfarb, CFO at Duos Technologies Group]

And then sorry. What was the other what was the other number you asked on that?

[Mike Latimore, Managing Director & Senior Research Analyst at Northland Capital Markets]

Depreciation.

[Adrian Goldfarb, CFO at Duos Technologies Group]

Yeah. The depreciation depreciation will will start to increase as the edge data centers come online, but I don't expect much impact for that for q two.

[Mike Latimore, Managing Director & Senior Research Analyst at Northland Capital Markets]

Okay. Great. Thanks. Congrats on the great start here.

[Charles Ferry, CEO & Director at Duos Technologies Group]

Thanks, Mike.

[Operator]

The next question comes from the line of Ed Woo with Ascendiant Capital Markets. Please proceed.

[Edward Woo, Director of Research & Senior Analyst at Ascendiant Capital]

Yeah. Congratulations also on the progress. My question is, you know, there's been a little bit of volatility obviously with the tariff.

[Edward Woo, Director of Research & Senior Analyst at Ascendiant Capital]

Have you noticed any change in the sales cycle of trying to, you know, sign contracts either in the edge data center business or with your power business? Have you had any, you know, change in macro outlook with any of your potential customers?

[Charles Ferry, CEO & Director at Duos Technologies Group]

No. No. We haven't.

[Charles Ferry, CEO & Director at Duos Technologies Group]

And we're actually in pretty good shape compared to some some other companies in in that regard. On on the power side, you know, APR Energy owns all of the assets, and all of the assets right this moment are in The United States. And and so those are literally shielded from from tariffs. If if APR, you know, with our assistance, thinks about buying more assets than we are, I I stated that in my comments, those could potentially be subject to tariffs. But right now, it's it's it's of no impact to us.

[Charles Ferry, CEO & Director at Duos Technologies Group]

On the edge data center side, there are some raw materials that are used in those construction of the edge data centers that could be subject to the tariffs. But right now, we're we're we're kinda shielded by that based on the agreement that we have with AccuTech, but it is something for us to watch. But, again, for right now, there's no impacts to us on on those two lines of business.

[Edward Woo, Director of Research & Senior Analyst at Ascendiant Capital]

And you don't really see people kind of holding off on signing deals or entering into, you know, agreements with you guys?

[Charles Ferry, CEO & Director at Duos Technologies Group]

No.

[Charles Ferry, CEO & Director at Duos Technologies Group]

Not at all. In in these two lines of business, commercially, they're both on fire right this moment, which is a great thing for us. So there is no slowdown right now. And it it well, where it has put us into an enviable position where we're able to kinda evaluate, you know, which customers we actually wanna prioritize. So right now, we're we're we're we're in good shape.

[Edward Woo, Director of Research & Senior Analyst at Ascendiant Capital]

Great. Great to hear, and I wish you guys good luck. Thank you.

[Charles Ferry, CEO & Director at Duos Technologies Group]

Okay. Thank you, Ed.

[Operator]

And the next question comes from the line of Dan Weston with West Capital Management. Please proceed.

[Dan Weston, General Manager at WestCap Mgt. Ltd]

Yeah. Hi. Thanks very much.

[Dan Weston, General Manager at WestCap Mgt. Ltd]

Congrats, guys, on all the progress. The transformation seems pretty astonishing. A couple of questions. The on the edge data center, on your guidance of a 50 to 200 by end of year twenty seven, given 15 by the end of this year, that assumes a pretty massive ramp going into the next two years. How do you see that playing out?

[Dan Weston, General Manager at WestCap Mgt. Ltd]

In other words, would you expect all of those to be for the typical school districts that you've been targeting? Or do you have some contribution coming in from the potential hyperscaler customers you're speaking with?

[Charles Ferry, CEO & Director at Duos Technologies Group]

Yeah. No, Dan. Thanks for the question.

[Charles Ferry, CEO & Director at Duos Technologies Group]

I I would see it as a combination of both. So, you know, right now, we're focused because we're just getting a lot of a lot of activity, you know, on these school districts down in Texas, which are are in a in a good position where they have federal and state funds to to, you know, to kind of pull these things in. It allows us to go and install on their property not and not have to pay a whole lot from a real estate perspective. And then it attracts, you know, a lot of customers from that local market now to fill out that educated sense. So it's a win win scenario there.

[Charles Ferry, CEO & Director at Duos Technologies Group]

As I said before, we are in discussion with a couple different hyperscalers. What what we're seeing in this in this data center space is that because there's not enough power for the for many of the larger data center parks to be had right this moment. Many of the data center hyperscalers are taking a real hard look at go using edge data centers, which don't require as much power in one location. In other words, they're they're they're kind of distributed, you know, out, you know, out amongst, you know, a particular area. It's it's easier to get power for them.

[Charles Ferry, CEO & Director at Duos Technologies Group]

And so they're looking at not only individual edge data centers at a particular location, but potentially small, what we call, pod farms, you know, where you have, you know, five, ten, you know, or maybe up to 20 of these things in a single location that they don't draw nearly as much power, and they get, you know, they get the the computing put out closer to where the customers need it. So I we're gonna see more of that, and I anticipate we'll probably be able to commercially talk about that in more detail. I'm I'm gonna I'm gonna bet here in the next quarter or two for sure based on those discussions.

[Dan Weston, General Manager at WestCap Mgt. Ltd]

No. I I I appreciate that, Chuck.

[Dan Weston, General Manager at WestCap Mgt. Ltd]

You you you mentioned the the scarcity of power for the large data center parks. Can can you provide any updates relating to your project out in Tampa, the large park there? Any any additional commentary or timing you're expecting to have that operational?

[Charles Ferry, CEO & Director at Duos Technologies Group]

Yeah. You know, we publicly talked.

[Charles Ferry, CEO & Director at Duos Technologies Group]

You know, we're absolutely committed to developing APR Energy is with Fortress Investment Group as their sponsor, and, of course, we're a part of that. The the plans right now are gonna develop that data center park. We have progressed it to the point where we will close on actually owning the property there probably in the next two months. And then all of the studies and all the prep work that goes in is ongoing right now. So, you know, APR and their will make their final decision to progress that here in the next month or so.

[Charles Ferry, CEO & Director at Duos Technologies Group]

And and when they do, they'll they'll announce that. But I would tell you that there are other similar opportunities that look a lot like Tampa as well. So, you know, kinda kinda watch this space because this is an opportunity where we'll be assisting APR and providing, obviously, the the temporary bridging behind the meter power, very likely a permanent power solution, and then the actual build out of the data center park itself for for one or two of the of the key hyperscalers that we're in discussions with right now.

[Dan Weston, General Manager at WestCap Mgt. Ltd]

Yeah. I I really appreciate that color, Chuck.

[Dan Weston, General Manager at WestCap Mgt. Ltd]

You you forget the maybe the remedial question, but considering the the current portfolio of power is soon to be sold out, if you will, how do you see that playing out in terms of allocating for new projects, whether it be Tampa or others and that come on stream, anything that you can talk to would be appreciative.

[Charles Ferry, CEO & Director at Duos Technologies Group]

Yeah. So the so our our fleet of power turbines, obviously, it's finite. And, again, you'll it will be obvious to to those who are familiar with that business. I've been careful not to tell folks, at least in this call, the the the length of term of contracts and things like that.

[Charles Ferry, CEO & Director at Duos Technologies Group]

So, you know, very broadly, a lot of the work that we've contracted is for work to be performed this year, and it'll allow us to it'll allow APR Energy and and we'll benefit through the asset management agreement to monetize those assets very, very quickly shortly after this shortly after the the acquisition of these things. And then we have probably three or four very large behind the meter data center projects that are already lined up to to take these assets. So, effectively, what you're trying to is you're trying to maintain a very high utilization rate of those assets. That's the name of the game in that business is is is high utilization rate. I will say that the demand for this is so high.

[Charles Ferry, CEO & Director at Duos Technologies Group]

We are assisting APR Energy in evaluating opportunities to acquire additional assets so we can actually grow the overall value of the APR business. And, of course, for us, we benefit from that 5% ownership stake in that business. So it's a win win for both companies.

[Dan Weston, General Manager at WestCap Mgt. Ltd]

I appreciate that, Chuck, answering the questions. And congrats again.

[Dan Weston, General Manager at WestCap Mgt. Ltd]

The progress has been really amazing. So good luck. Thanks very much.

[Charles Ferry, CEO & Director at Duos Technologies Group]

All right. Thanks, Dan. Appreciate it.

[Operator]

Thank you. Ladies and gentlemen, this concludes the question and answer session. I'll hand the call back to Mr. Ferry for closing remarks.

[Charles Ferry, CEO & Director at Duos Technologies Group]

Yes. Thanks very much, operator. Again, thanks to everybody that's on the call today. And then and again, just wanna reiterate my thanks to, you know, all of our our partners, our shareholders, our board members, and then, you know, a special thank you to the the Duos leadership and employee team that's making all this good stuff happen. Thank you very much.

[Operator]

Before we conclude today's call, I would like to provide Rose's Safe Harbor statement that includes important cautions regarding forward looking statements made during this call. This earnings call contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward looking terminology such as believes, expects, may, will, should, anticipates, plans, and or opposites or similar expressions are intended to identify forward looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements are made are based and could cause Technologies Group Inc. Actual results to differ materially from those anticipated by the forward looking statements.

[Operator]

These risks and uncertainties include, Barna Lemnitzu, those described in Item 1A in Duos' annual report on Form 10 ks, which is expressly incorporated herein by reference and other factors as may periodically be described in Duo's filings with the SEC. Thank you for joining us today for Duo Technologies Group's first quarter twenty twenty five earnings call. You may now disconnect.

Participants

Executives

• Charles Ferry, CEO & Director
• Adrian Goldfarb, CFO

Analysts

• Mike Latimore, Managing Director & Senior Research Analyst at Northland Capital Markets
• Edward Woo, Director of Research & Senior Analyst at Ascendiant Capital
• Dan Weston, General Manager at WestCap Mgt. Ltd