Company: FOXX
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-043597
Chunk: 179

Company: Foxx Development Holdings Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 8
Chunk 179
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 profit percentage 
     5.8% 
     (7.7)% 
     13.5% 

For the three months ended
March 31, 2025 and 2024, our overall gross profit percentage was 5.8% and (7.7)%, respectively. The increase in gross profit percentage
of 13.5% was primarily due to the increases in gross profit percentage for tablet, mobile phone, wearable products and others and App
service commission revenue and others.

Gross profit percentage of
tablets improved from 0% to 20.2% from the three months ended March 31, 2024 to the same period in 2025. This was primarily due to our
change of business strategy as discussed above, which lead to the increase in the unit selling price of electronic products, and the decrease
in the unit purchase price of the purchasing goods.

38

Gross loss percentage for
mobile phones decreased from (7.7)% to (2.8)% for the three months ended March 31, 2024, to the same period in 2025. This decrease was
primarily due to the increasing sales of mobile phones with higher gross profit percentage during the three months ended March 31, 2025.

For the three months ended
March 31, 2025, our gross profit percentage of wearable products was 9.2%. We did not have this kind of products for the three months
ended March 31, 2024.

For the three months ended
March 31, 2025, our gross profit percentage of App service commission and others was 97.2% because App service commission revenue was
commission based revenue that was earned at a point in time when the revenue is generated from the App, that is when clicks and/or impressions
occur at a point in time when the end users of the mobile devices use the App and we received the App revenue share (service commission)
from our partners without cost of goods. We did not have this kind of service for the three months ended March 31, 2024.

Operating Expenses

Total operating expenses
increased by approximately $3.4 million, or 461.0%, to approximately $4.2 million for the three months ended March 31, 2025 from approximately
$0.8 million for the three months ended March 31, 2025.

Our operating expenses are
summarized as follows: