Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 177

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 8
Chunk 177
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2025 public equity
offering to ramp the supply chain which we believe will lead to improved product sales. Cost of product sold as a percentage of product
revenues for the video solutions segment decreased to 119% for the three months ended March 31, 2025 as compared to 111% for the three
months ended March 31, 2024.

The decrease in entertainment
operating segment cost of product sold directly correlates to the lower product revenues for the three months ended March 31, 2025. Cost
of Product Revenues were $611,087 and $769,899 for the three months ended March 31, 2025 and 2024, a decrease of $158,812 (21%). Cost
of product sold as a percentage of product revenues for the entertainment segment increased to 92% for the three months ended March 31,
2025 as compared to 91% for the three months ended March 31, 2024.

Cost of Service Revenue

Overall cost of service revenue
sold for the three months ended March 31, 2025, and 2024 was $2,198,126 and $2,438,259, respectively, a decrease of $240,133 (10%). Overall
cost of goods sold for services as a percentage of service revenues for the three months ended March 31, 2025, and 2024 were 59% and 62%,
respectively. Cost of service revenues by operating segment is as follows:

    Three months ended March 31,

    2025

    2024

    Cost of Service Revenues:

    Video Solutions
     
    $
    301,968

    $
    355,105

    Revenue Cycle Management

    882,888

    970,867

    Entertainment

    1,013,270

    1,112,287

    Total Cost of Service Revenues
     
    $
    2,198,126

    $
    2,438,259

The decrease in cost of service
revenues for our video solutions segment demonstrates the leverage we are enjoying as we increase our service revenues during the three
months ended March 31, 2025 compared to the three months ended March 31, 2024. Cost of service revenues as a percentage of service revenues
for the video solutions segment decreased to 35% for the three months ended March 31, 2025 as compared