Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 82

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 1
Chunk 82
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 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 to 36% for the three months ended
March 31, 2024.

48

The decrease in revenue cycle
management operating segment cost of service revenue is commensurate with the decline in revenues due to certain loss generating services
being eliminated during the year. Cost of service revenues as a percentage of product revenues for the revenue cycle management operating
segment decreased to 65% for the three months ended March 31, 2025 as compared to 68% for the three months ended March 31, 2024.

The decrease in entertainment
operating segment cost of service revenues is due to management right sizing the business working towards profitability. The Entertainment
cost of service revenue was $1,013,170 for the three months ended March 31, 2025, compared to $1,112,287 for the three months ended March
31, 2024. Cost of service revenues as a percentage of service revenues for the entertainment segment decreased to 66% for the three months
ended March 31, 2025 as compared to 73% for the three months ended March 31, 2024.

Gross Profit

Overall gross profit for the three
months ended March 31, 2025 and 2024 was $1,796,034 and $1,523,699, respectively, an increase