Duos Technologies Group (NASDAQ:DUOT) shares declined 2.23% in premarket trading on Monday after the company posted first-quarter results that came in below analyst expectations, with revenue falling sharply year-over-year as it continues shifting toward AI-focused data center infrastructure operations.
Revenue Falls Sharply in First Quarter
The company reported a quarterly loss of -$0.15 per share for the period ended March 31, 2026, compared with analyst expectations for a loss of -$0.03 per share.
Revenue totaled $2.72 million, well below the consensus forecast of $8.4 million and down 45% from $4.95 million recorded in the same quarter last year.
Management said the revenue decline mainly reflected the planned wind-down of services tied to the Duos Energy and New APR Asset Management Agreement.
Company Maintains Full-Year Outlook
Despite the weaker quarterly performance, Duos reaffirmed its guidance for full-year 2026 revenue of more than $50 million.
The outlook is supported by a $176 million GPU-as-a-Service agreement signed with Hydra Host in March.
The company expects to recognize approximately $26 million in revenue from the partnership during the second half of 2026, with roughly $135 million expected over the remainder of the contract term.
Management also said it expects adjusted EBITDA to turn positive during the second half of 2026.
“We entered the year with significant momentum and a clear path to scale our diversified AI infrastructure platform,” said CEO Doug Recker. “We are now entering the execution phase on several significant projects, most notably our $200 million strategic partnership with Hydra Host, which is slated to come online in the second half and has us well positioned to achieve our $50 million target for 2026.”
Capital Raise Strengthens Balance Sheet
Duos completed a $65 million capital raise in March and ended the quarter with cash and cash equivalents of $33.03 million, up from $15.47 million at the end of December 2025.
Adjusted EBITDA for the first quarter came in at -$1.5 million.