viewDuos Technologies Group, Inc.

Duos Technologies moves full steam ahead with its intelligent technologies


The Florida-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


Quick facts: Duos Technologies Group, Inc.

Price: 6.68 USD

Market: NASDAQ
Market Cap: $23.61 m
  • Specializes in rail train inspections with its proprietary Railcar Inspection Portal (RIP) technology
  • Has 14 patents or patents pending as it builds out its technology and services portfolio
  • Recently raised $9 million to support growth plans while uplisting to Nasdaq

What Duos Technologies does: 

Duos Technologies Group Inc (NASDAQ:DUOT) offers an array of services to support companies' operations and security. Based in Jacksonville, Florida, Duos specializes in automated systems with a focus on the protection of critical infrastructure and the automation of complex mechanical inspections of rail assets. The North American rail market is estimated to be valued at US$60 billion.

Duos’ proprietary Railcar Inspection Portal (RIP) technology uses an automated process that can be conducted while a train is in motion. It's a 360-degree modular intelligent visualization system that takes detailed, real-time, full-picture images of railcars travelling at speeds of up to 120 miles per hour.

Its Linear Panorama Generator “scans” the top, bottom and sides and pieces them together like a puzzle, showing a complete picture of the railcar and producing a very high-definition picture of the entire train from end to end (called a “consist”). 

The panoramic view can detect oil leaks, damaged parts, open doors and open and missing hatches, alerting inspectors to the issue and showing them the location of the problem. Sophisticated algorithms also identify more complex issues, and can also spot illegal riders on the side of the train. 

The firm's systems are designed to incorporate intelligence, including video analytics, algorithms, and neural networking, in order to address specific needs. All rail solutions utilize the company’s xtd Extreme True Definition technology which captures over 200 Megapixel images when the train is moving. 

The company says it avoids a “one size fits all” approach, preferring to individually asses the needs of a system and build a turnkey solution for its customers.

Duos also operates an artificial intelligence subsidiary, truevue360, or tv360 for short. The AI-based platform supports Duos’s underlying software platforms for its rail inspection portal system, vehicle undercarriage examiner and advanced logistics information system.

How is it doing: 

Duos started 2020 with a notable contract win with major US railroad operator CSX Transportation, which owns and operates a combined 140,000 miles of rail track. Duos installed its rail inspection technology (RIP) as part of a project to help CSX automate mechanical inspections for its railcars, which have typically been conducted manually.

The CSX contract, which will be extended to include the installation of AI algorithms to complete the automation process, builds on a $1.8 million contract Duos won in late 2019 with another Class 1 freight railroad operator. And on April 23, Duos announced that it had clocked another $1.8 million contract for rail-related services.

The recent contracts underscore the promise of Duos’ flagship RIP technology as railroad companies seek ways to keep their railcars operating and hauling (and making money) rather than sitting ideal in rail yards, waiting for time-consuming and costly manual inspections. And it is also crucial for the railroad operators to keep their trains moving at lower costs as they seek to wrest back business from the trucking industry.   

That said, the company’s finances heading into 2020 and for the early part of the year also underscore how demand for its products and services is expanding and that the company is well-capitalized to support its growth needs for the rest of the year.

The group closed its fourth quarter to December 31, 2019, with a 125% increase in revenue to $5.75 million, up from $2.56 million in the year-ago period. For full-year 2019, Duos’ revenue increased by 13% to $13.64 million, up from $12 million in 2018.  The company's 4Q gross profit increased 176% year-over-year to $3.15 million and for full-year 2019 came in at $6.48 million, a 25% year-over-year jump.  

In February, Duos raised more than $9 million to support its future growth needs for the foreseeable future and also uplisted onto the Nasdaq, where its stock currently trades at around $4 a share. It has a market cap of more than $15 million. 

However, like most companies in the US and globally, Duos is grappling with the effects of the coronavirus (COVID-19) pandemic on its customers, operations and revenue goals. 

CEO Gianni Arcaini recently acknowledged that the company anticipates “an intra-year impact, which would result in possible shifting of revenues from the first half into the latter quarters of 2020.”

But he noted that Duos’ supply chain remains unaffected and the company controls its high-value revenue drivers. “We have also maintained consistent communications with our clients and put a plan in place to ensure ongoing business continuity,” he added. 

Inflection points: 

  • Maintains revenue guidance of $20 million for 2020, a 47% year-over-year increase 
  • Expects increases in recurring revenues from maintenance and technical support division
  • Anticipates growth in truevue360 AI subsidiary

What the boss says: 

"We ended the year on a high note, with a record performance in the fourth quarter driven by strong performances in each of our operating divisions," said Duos' CEO Gianni Arcaini.

"Most notably, we closed agreements and completed a series of major project implementations toward the end of 2019, supporting our decision to allocate greater resources earlier in the year to meet this expected increase in demand. In Q4 we also achieved profitability thanks to the substantial gross margin increases we generated in the period. We expect to incrementally improve our fundamentals on an annual go-forward basis as we benefit from economies of scale through larger contracts as well as steady increases in recurring revenues from our maintenance and technical support division and the anticipated growth from our truevue360 AI subsidiary.”

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