Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 280

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 2
Chunk 280
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 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 service revenues for our video solutions segment demonstrates the leverage we are enjoying as we increase our service
revenues during the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Cost of service revenues
as a percentage of service revenues for the video solutions segment decreased to 24.5% for the three months ended September 30, 2025
as compared to 30.3% for the three months ended September 30, 2024.

Cost
of service revenues as a percentage of service revenues for the revenue cycle management operating segment remained consistent at 62.5%
for the three months ended September 30, 2025 as compared to 58.4% for the three months ended September 30, 2024.

The
increase in entertainment operating segment cost of service revenues is due to management right sizing the business working towards profitability.
The entertainment segment terminated several unprofitable sponsorships which required termination payments during the three months ended
September 30, 2025, that is expected to lead to improvements in costs of service revenues during the remainder of 2025. The entertainment
segment cost of service revenue was $1,111,577 for the three months ended September 30, 2025, compared to $559,143 for the three months
ended September 30, 2024. Cost of service revenues as a percentage of service revenues for the entertainment segment increased to 85.8%
for the three months ended September 30, 2025 as compared to