Company: DSNY
Filing Date: 2025-11-24
Form Type: 10-K
Source: 0001062993-25-016994
Chunk: 179

Company: DESTINY MEDIA TECHNOLOGIES INC
Filing Date: 2025-11-24
Form: 10-K
Item: Item 5
Chunk 179
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 Euros to U.S. Dollars during the fiscal year.

Cost of Revenue 

Cost of revenue for the year ended August 31, 2025 increased by 12.5% to $686,553 compared to the cost of revenue of $610,527 for the year ended August 31, 2024.

The Company's cost of revenue primarily includes data hosting and processing, third-party transaction costs, and engineering, technical, and customer support expenses. These costs are influenced by transaction volume and the mix between full-service and self-service customers, with self-service users uploading and publishing releases independently and full-service customers supported by internal staff.

                13

Gross Margin

Gross margin for the year ended August 31, 2025 was 84.8% of revenue, which represents a 1.4 percentage point decrease compared to the year ended August 31, 2024. This decline in gross margin is primarily caused by infrastructure required to build out the MTR™ business.

Operating Expenses

Operating costs during the year ended August 31, 2025 increased by 20.0% to $4,500,961 (2024 - $3,749,684). The increase in operating costs was primarily the result of the following:

                An increase of 77.4% in (non-cash) amortization expenditures, primarily related to the capitalization of salaries and wages in previous periods. This increase contributed a 9.7% increase to overall expenditures.
                A one-time, non-repeating cost associated with litigation increasing total costs by 6.6%.  On October 24, 2025, the Company received a favorable judgement. All claims have been dismissed, and the Company was awarded costs; however no related recoveries have been recognized in the financial statements as of the reporting date.
                Telecommunication expenses contributed to a 3.3% increase in total costs, primarily driven by operating costs related to MTR™.
                Wages and benefits contributed to 1.9% increase in total expenditures, mostly due to one-time recruitment fee and lower capitalized salaries and wages during the year. The above increases were partially offset by a reduction in overall staffing, as the Company prioritized increased productivity and operational efficiency.

For ease of reference the following table has been prepared to present operating results had the Company not capitalized software for fiscal years 2025 and 2024.

                        2025

                        2024

                        Net Income for the Year
                        $
                        (637,