Release Date: November 20, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Duos Technologies Group Inc (DUOT, Financial) signed a two-year asset management agreement worth an estimated $42 million to manage 850 megawatts of power generation assets.
- The company has expanded its investment in the Duos Edge AI subsidiary, adding three new edge data centers for a total of six ready for deployment.
- Revenue for Q3 2024 increased by 112% to $3.24 million compared to the same quarter in 2023, driven by technology systems and recurring services.
- Operating expenses for Q3 2024 decreased by 11% compared to Q3 2023, attributed to reductions in development and administrative costs.
- Duos Technologies Group Inc (DUOT) anticipates becoming profitable in 2025 due to new initiatives and expected growth in various business segments.
Negative Points
- Total revenue for the first nine months of 2024 decreased slightly to $5.82 million from $5.95 million in the same period last year.
- The company experienced a net operating loss of $1.92 million for Q3 2024, although this was an improvement from the previous year.
- Cash and cash equivalents decreased to approximately $646,000 as of September 30, 2024, compared to $2.44 million at the end of 2023.
- The company implemented a 5% reduction in staff in early Q3 2024 as part of cost management efforts.
- There are ongoing delays with the Amtrak railcar inspection portal project, impacting financial performance in previous quarters.
Q & A Highlights
Q: Chuck, did you say that the assets you will be deploying and managing are the same ones you used to work with at APR?
A: Yes, that's correct. I was the CEO for APR Energy, and many of the folks who worked with me there have joined me at Duos. We are very familiar with these assets and will be off to a fast start in managing them.
Q: On the $42 million revenue over two years, is that guaranteed revenue, and does it build over time as you deploy these turbines?
A: It's estimated revenue based on our financial models with Fortress Investment Group. It's not guaranteed but expected to build over time as we deploy the systems, potentially leveling out as we progress.
Q: As you move into the power and data center business, who are your competitors, and has there been a change in the competitive landscape?
A: In the edge data center business, there are competitors like Ubiquity, but demand is high, so we haven't seen direct competition yet. In the power sector, we face competition from large OEMs like General Electric and Siemens. The main challenge is equipment availability, which we currently have an advantage in.
Q: Can you give us any sense of what you're expecting for subscription revenue from your rail business in 2025?
A: We currently forecast about $2 to $3 million in subscription revenue for the railcar business in 2025.
Q: Regarding the data center business, you mentioned deploying 15 edge data centers by the end of next year. Are there plans to accelerate this?
A: Yes, Doug Recer and I are in discussions with hyper scalers to potentially accelerate deployment through partnerships. These discussions are ongoing, and we can't disclose more details at this time.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
