Duos Technologies posts first positive operating quarter as AI and Data Center pivot drives 30% revenue growth. 18 August 2026, 10:30 AM AI and Data Center expansion fuels accelerating revenue and margin gains. Duos Technologies Group (NASDAQ: DUOT) reported standout financial results for the second quarter of 2026, as the company's strategic shift to AI and Edge Data Center infrastructure delivered tangible results. Q2 revenue jumped nearly 30% year-over-year to $6.18 million, largely on the back of a sharp ramp in technology solutions and data center deployments. Importantly, Duos posted its first positive operating quarter as a data center infrastructure provider, marking a significant inflection point for the business. Financial highlights: margin expansion and strong capital position. The company reaped the benefits of higher-margin business lines and cost controls, with gross margin nearly doubling to 94% year-over-year. Net income before taxes surged to $53.64 million, propelled by the sale of non-core investments, and cash on hand ballooned to $112.31 million from $15.47 million at year-end. With over $100 million in new capital raised through transactions and direct investments, Duos has ample liquidity to fund its ambitious growth strategy and fulfill its current 25 MW in contracted deployments - all expected to come online in 2026. | Key Metric | Q2 2026 | Q2 2025 | % Change | | Revenue ($M) | 6.18 | 4.77 | +29.6% | | Gross Margin ($M) | 3.45 | 1.78 | +93.8% | | Net Income Before Taxes ($M) | 53.64 | (1.62) | NM | | Cash & Equivalents ($M) | 112.31 | 15.47 | +626.0% | Strategic milestones: major hosting deals and project backlog solidify path forward. The latest quarter saw Duos clinch transformative agreements, including a five-year, 55 MW hosting contract with Axe Compute valued over $500 million, and a 10 MW, $111 million commitment with a major hyperscaler at its Columbus, GA campus. The company also executed a deliberate divestiture of its legacy rail business to fully focus on the fast-growing Edge Data Center and AI infrastructure markets. Duos now boasts 25 MW contracted - all targeted for 2026 deployment - highlighting its ability to rapidly mobilize modular infrastructure in underserved Tier 3 and Tier 4 markets. Event-driven capital raises and asset sales yielded over $100 million, shoring up its balance sheet and funding the company's expansion pipeline. Profitability and backlog growth signal inflection. For the first time in its transformation, Duos posted a modest positive operating income of $0.05 million, compared to a $1.54 million loss a year ago. This result reflects not only the benefit of scale in higher-margin lines but also the positive effects from cost containment and the recognition of deferred revenue tied to asset divestitures. The near-term outlook appears promising: Duos management reaffirmed guidance totaling more than $50 million in 2026 revenue, with approximately $43.5 million already booked or expected from current contracts and awards. A growing backlog - approximately $28 million in technology solutions as of mid-year - supports management's confidence in maintaining positive adjusted EBITDA through the second half. | Backlog & Bookings (Mid-2026) | Amount ($M) | | Total Committed Bookings | 43.5 | | Technology Solutions Backlog | 28.0 | | Revenue Guidance (Full-Year 2026) | >50.0 | Duos' structural shift unlocks capital and accelerates growth. With operational momentum, a robust backlog, and focus sharpened on edge data center and AI infrastructure, Duos is positioned to address swelling customer demand for high-performance computing in regional markets. The company's addition to the Russell 2000 Index further highlights its growing investor profile. CEO Doug Recker emphasized, "We've made tremendous progress both in operational execution and the fundamental repositioning of our business...highlighted by a 30% increase in revenue and a material improvement in profitability." For investors and industry observers, Duos' Q2 2026 performance provides evidence that its pivot away from legacy rail and toward AI-centric, high-density deployment is paying dividends. With $128 million in cash and contracted assets, and fully funded plans for 2026 - including 25 MW of deployments - Duos is worth monitoring as the company attempts to cement its niche in the rapidly expanding edge infrastructure ecosystem. Upcoming: investor call and continued expansion. Duos will host its Q2 earnings call on August 17 at 4:30 p.m. Eastern time. Investors can expect updates on contract progress, deployment timelines, and additional growth milestones as the company executes on its ambitious 2026 agenda. 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Axe Compute and Duos Technologies sign 55MW capacity agreement. Will cover multiple US locations August 17, 2026 Neocloud Axe Compute has signed an agreement with data center firm Duos Technologies for multi-location capacity across the US. The sites will add up to around 55MW of capacity and represent more than $500 million in aggregated payments for Duos. Duos is known for its modular and scalable Edge data center offering, with deployments across Texas and Georgia. The deal builds on an existing partnership between the two companies in which Duos is delivering a 10MW deployment at its data center in Georgia for Axe Compute. The project is expected to begin in late 2026 and continue through early 2027. Duos Edge AI previously announced that it had signed a five-year agreement with an unknown "investment-grade hyperscaler" to provide 10MW of capacity from its data center campus in Columbus, Georgia. A further 2MW has been contracted by Nistar. Under the terms of the agreement, Axe will hold a 49 percent equity investment in the data centers, meaning that rather than just renting space in someone else's facility, the company will hold a stake in both the buildings and power. Axe notes that it is securing capacity ahead of customer requests so that deployments are not subject to delays. "When you find a partner that does a great job, and you can trust, you want to do more business with them. That is what we have found in Duos," said Christopher Miglino, CEO of Axe Compute. "We see compute demand accelerating, and we are excited to deliver more Axe Compute Build contracts to our customers alongside a key partner." "Signing these agreements marks an important step in expanding our relationship with Axe Compute and the Duos platform," added Duos CEO Doug Recker. "Our work in Georgia established a strong foundation, and this expansion demonstrates the scale of the opportunity and the accelerating demand for AI infrastructure. We believe Duos and Axe Compute can create a repeatable model for bringing purpose-built AI capacity to market." Axe Compute is a newcomer on the neocloud scene. Headquartered in Pittsburgh, Pennsylvania, the company has had various identities over the years. Its earliest SEC filings state the company was previously known as Skyline Medical, offering a system for the collection and disposal of infectious fluids from surgical procedures, rebranding twice more before a final rebranding into Axe Compute in late 2025. When the company first pivoted to neocloud services, it adopted a Web3 GPU provider, but has since begun sourcing its own capacity to offer more traditional neocloud services. Axe Compute recently published its Q2 2026 earnings results, its first full quarter in which it has generated revenue from compute services. The company saw revenue of $3.2 million, compared to $35,000 the quarter prior. Q2 had a net loss of $17.2m driven by "a non-cash $13.1m loss on digital assets, primarily reflecting changes in digital asset holdings and related receivables." In July alone, Axe Compute notes that it signed $2.8bn of contracts, and once deployed, it is targeting an annualized revenue run rate of $696m. More in cloud & hyperscale.

Duos Technologies Group has completed the sale of its rail technology subsidiary, Duos Technologies, Inc. (DTI), to Sandbank Acosta, LLC. The transaction closed on 5 August 2026, with effect as of 30 June 2026. DTI, which operates the largest installed base of Railcar Inspection Portals in North America, will continue as an independent, privately held company under the DuosTI brand. Javier Acosta has been appointed president of the newly independent entity. The sale completes Duos' strategic repositioning announced in March 2026, allowing the company to focus entirely on its Edge Data Centre and AI infrastructure businesses through Duos Edge AI and Duos Technology Solutions. The transaction was reviewed as a related-party deal, as interim CFO Adrian Goldfarb holds a 50% membership interest in the purchasing entity.