Duos Technologies Group completed the sale of its legacy rail business on August 5, 2026, marking a strategic pivot toward AI infrastructure and edge data center operations. The transaction included a $53.2 million gain from the divestiture of a 5% interest in New APR Energy, providing the company with $50.4 million in immediate cash proceeds and strengthening its balance sheet.
The company validated its edge AI strategy through a significant $111 million colocation agreement with Axe Compute for 10 megawatts of capacity in Columbus, Georgia. This initial arrangement was followed by an additional 55-megawatt expansion agreement, bringing total contracted capacity with Axe to 65 megawatts. The financing structure utilizes a non-dilutive special purpose vehicle model, with Axe providing up to $140 million in cash equity for a 49% stake in the projects, thereby covering the majority of data center capital expenditures.
Operationally, the company achieved positive adjusted EBITDA ahead of schedule, driven by a structural shift toward higher-margin technology solutions and infrastructure services. The Technology Solutions segment generated $3.23 million in quarterly revenue during the period. Management also appointed Dipan Patel as Chief Operating Officer to oversee execution across the expanding edge data center and technology platforms. The company streamlined its workforce to approximately 25 full-time employees following the rail business divestiture, down from 100 employees a year prior.
Looking forward, Duos reconfirmed 2026 revenue guidance exceeding $50 million, supported by a $43.5 million bookings backlog and expected GPU-as-a-service contributions. The company projected a fourth quarter 2026 annualized recurring revenue exit run rate exceeding $70 million with anticipated gross margins above 70%. For 2027, management established a revenue framework of at least $160 million, assuming full-year contributions from contracted GPU programs and colocation deployments. The company aims to reach 25 megawatts of contracted capacity in 2026, with a total of 75 megawatts now under contract following recent expansions.
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