Duos Technologies Group Reports Q1 2026 Results With Lower Revenue, Divests Rail Business to Fund Data Center Pivot

Duos Technologies Group reported first-quarter 2026 financial results on Monday and launched a new division called Duos Technology Solutions. The division holds a backlog of approximately $14 million expected to be invoiced by the end of 2026. The company is proceeding with the divestiture of its legacy rail division to free up capital and reduce overhead for data center growth.

Duos holds a 5% stake in APR Energy, and a potential acquisition of that firm could produce a significant financial windfall if completed. Duos completed a $65 million capital raise and ended the quarter with $33 million in cash. The company has also received substantial customer deposits that support near-term projects.

A GPU-as-a-service agreement with Hydro Host is valued at $176 million over 36 months and is expected to generate $40 million in EBITDA. 8 megawatts for a hyperscaler. The company plans to expand physical deployment to 25 megawatts by the end of 2026 and has set a target to double capacity to 50 megawatts by 2027.

Despite lower revenues tied to the wind-down of the APR Asset Management Agreement, Duos recorded a 59% gross margin in the first quarter after implementing cost reductions. Management outlined a pathway to a $50 million revenue target for the year, with contributions expected from GPU services and the new Technology Solutions division.

Duos is positioning itself in the AI infrastructure market with a focus on rapid deployment of edge data centers in tier 2 and tier 3 markets.