Duos Technologies raises full-year sales guidance after big leap in second-quarter revenue

Duos Technologies Group Inc (OTCQB:DUOT), a provider of advanced intelligent security and analytical technology for the rail industry, announced Tuesday that it was raising full-year revenue guidance to US$10.1mln after strong second-quarter revenue.

For the quarter ended June 2018, revenue surged 179% to a record US$3.2mln from US$1.2mln in the same quarter last year.

The leap in revenues comes from strong project revenue driven by the company’s pivot to analytics, Artificial Intelligence-driven technologies systems and machine learning, as opposed to traditional legacy security-centric offerings.

“Our record performance in the 2Q represented a successful milestone in our long-term plan to significantly scale our business,” said Duos CEO Gianni Arcaini, a 30-year veteran of the tech space.

PIG PICTURE: Duos Technologies wants to put the railroad industry on the fast track

“In addition to growing our topline nearly 180%, we also made meaningful strides toward our goal of achieving GAAP profitability despite certain non-cash compensation charges that we recognized in the quarter. With the opening of our new engineering and operations facility, we can continue efficiently and organically expanding our operations to meet our current needs as well as our future growth plans,” said Arcaini.

Gross profit increased 118% to US$1.3mln from US$577,000 in the same quarter last year. The company said gross profit in 2018 was affected by “certain accounting changes” related to the implementation of Accounting Standards Codification and “anticipates these profits will be recorded later in the year.”

The Jacksonville-based company specializes in automated systems with a focus on the protection of critical infrastructure and the automation of complex mechanical inspections of rail assets. During the quarter, Canadian National Railway (NYSE:CNI), a leading Class-1 transportation and logistics company, signed an initial contract for four complete rail inspection portals and machine-learning algorithms.

The Burlington Northern Santa Fe Corp is also a client of Duos Technologies.

Duos also saw the deployment of a US$3mln contract with one of the country’s largest retail chains to streamline and automate gatehouse operations across its distribution centers.

“As a result of the ongoing success of our operations and increasing business momentum, we are increasing our revenue outlook to approximately US$10.1mln in 2018, an approximate 160% increase as compared to the US$3.9mln reported revenue in the fiscal year ended December 31, 2017,” said Arcaini.

READ: Duos Technologies introduces a new data collection and IT asset auditing platform

The guidance is based on the contracts currently in backlog and additional awards on the horizon. With new contracts in the works, Duos sees more growth as it rolls down the tracks. 

“With our core technology now fully developed and ready to deploy, we anticipate this growth to continue as we win new business and begin deployments throughout the remainder of the year and beyond,” said Arcaini.

The company recently opened an engineering center for pre-assembly and testing of Duos’ proprietary intelligent technologies and sub-systems as well as to house its rapidly expanding engineering and operations teams. Duos also launched its proprietary dcVue software platform, which is designed to enable automation and mobile verification of large-scale data center IT assets.

Shares of Duos Technologies rebounded to rise 9% in morning trading to US$0.48 in New York after falling 2.2% to US$0.44 in pre-market trade.

Contact Uttara Choudhury at [email protected]

Follow her on Twitter: @UttaraProactive 

Story by ProactiveInvestors