Company: DSNY
Filing Date: 2025-01-14
Form Type: 10-Q
Source: 0001062993-25-000745
Chunk: 9

Company: DESTINY MEDIA TECHNOLOGIES INC
Filing Date: 2025-01-14
Form: 10-Q
Item: Part I, Item 2
Chunk 9
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 for the three months ended November 30, 2023.  The Company's cost of revenue consists of data hosting and processing charges, third party transaction related costs, and engineering, technical and customer support costs.  These costs are driven by the size and volume of customer transactions processed, as well as the relative proportion of "full-service" versus "self-service" revenue. Our self-service sales are derived from customers who have been provided with a customer account to access our encoder to independently upload and publish releases. Our full-service revenue is derived from customers who are fully serviced by our internal staff, who prepare and publish releases on their behalf.  During the three months ended November 30, 2024, our gross margin increased over the comparative period primarily due to decrease staffing in the technical and customer support departments. Operating ExpensesOperating costs during the three months ended November 30, 2024 increased by 27.5% to $960,910  (November 30, 2023 - $753,394).  The increase in operating costs was primarily the result of the following:While total salaries and wages remained consistent with the prior period, the amount capitalized to capital software assets and software under development intangible asset was lower this period, resulting in an increase to total operating expenses of approximately 13.8%. A reconciliation is provided below.Due to capitalization of salaries and wages in previous periods, depreciation of computer software increased in the current period and resulted in a 11.4% increase in total operating expenses.For ease of reference the following table has been prepared to present operating results had the Company not capitalized software for the three months ended November 30, 2024 and 2023.  Three Months Ended November 30,   2024  2023   Net income for the period$118,140 $249,516   Capitalized software development (92,647) (177,402)  Adjustment to amortization for capitalized software 163,803  1,037   Adjusted non-GAAP income$219,170 $73,151  15  Three Months Ended November 30,    General and administrative expenses 2024  2023  $ Change  % Change Wages and benefits$80,739 $73,446  7,293  (9.9%) Professional fees 15,090  23,144  (8,054) (34.8%)