Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 226

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 8
Chunk 226
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    Revenue Cycle Management 
     —  
     — 
  
    Entertainment 
     428,523  
     390,226 
  
    Total Cost of Product Revenues 
    $905,190  
    $547,562 

The
increase in cost of goods sold for our video solutions segment was primarily attributable to a higher component and expedite freight
costs, increased repair and refurbishment costs for returned units, and increased scrap – receiving associated with incoming inspection
failures as compared to the same period in the prior year. Cost of product sold as a percentage of product revenues for the video solutions
segment increased to 207.6% for the three months ended September 30, 2025 as compared to 51% for the three months ended September 30,
2024.

Cost
of products sold within the entertainment segment increased slightly period over period, principally due to higher variable costs (ticket
acquisition, event settlement, and payment processing). The increase was partially offset by a continued focus on higher-margin events,
which limited cost growth as a percentage of revenue. Cost of product sold as a percentage of product revenues for the entertainment
segment increased to 98.6% for the three months ended September 30, 2025 as compared to 78.40% for the three months ended September 30,
2024.

Cost
of Service Revenue

Overall
cost of service revenue sold for the three months ended September 30, 2025, and 2024 was $2,260,392 and $1,764,175, respectively, an
increase of $496,217 (28.1%). Overall cost of goods sold for services as a percentage of service revenues for the three months ended
September 30, 2025, and 2024 were 58% and 54%, respectively. Cost of service revenues by operating segment is as follows:

    Three months ended September 30, 

    2025  
    2024 
  
    Cost of Service Revenues: 

    Video Solutions 
    $298,605  
    $269,962 
  
    Revenue Cycle Management 
     850,210  
     935,070 
  
    Entertainment 
     1,111,577  
     559,143 
  
    Total Cost of Service Revenues 
    $2,260,392  
    $1,764,175 

The
increase in cost of