Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 83

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 1
Chunk 83
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 of $272,335 (18%). Gross profit by operating
segment was as follows:

    Three months ended March 31, 

    2025  
    2024 
  
    Gross Profit: 

    Video Solutions 
    $555,761  
    $565,694 
  
    Revenue Cycle Management 
     467,663  
     463,731 
  
    Entertainment 
     578,075  
     494,274 
  
    Total Gross Profit 
    $1,601,499  
    $1,523,699 

The increase in
gross profits is primarily due to improvements in our cost of sales as a percentage of sales particularly in our entertainment
segment service revenues. There was an overall decrease in the cost of sales as a percentage of overall revenues to 64% for the
three months ended March 31, 2025 from 72% for the three months ended March 31, 2024. This is primarily driven by large head-count
reductions in our work-force during the three months ended March 31, 2025 as compared to 2024, a focus on right sizing recent acquisitions to increase
profitability and a transition to a service subscription-based model in our video solutions segment. Our goal is to improve our
margins over the longer term based on the expected margins generated by our new recent revenue cycle management and entertainment
operating segments together with our video solutions operating segment and its expected margins from our EVO-HD, DVM-800, VuLink,
FirstVu Pro, FirstVu II, EVO Fleet, FLT-250, DVM-250, DVM-250 Plus and our cloud evidence storage and management offering, provided
that they gain traction in the marketplace. We plan to continue our initiative to more efficient management of our supply chain
through outsourcing production, quantity purchases and more effective purchasing practices.

Selling, General and Administrative Expenses

Selling, general and administrative
expenses were $2,576,179 and $5,162,733 for the three months ended March 31, 2025 and 2024, respectively, a decrease of $2,586,554 (50%).
The decrease was primarily attributable to the reduction in new advertising sponsorships being entered into by the Company. Our selling,
general and administrative expenses as a percentage of sales increased to 58% for the three months ended March 31, 2025 compared to 93%
in