Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 98

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 98
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    Entertainment
    segment revenue was $434,793 for the three months ended September 30, 2025, compared to $497,700 for the three months ended September
    30, 2024, a decrease of $62,907 (12.6%). Segment revenue includes amounts related to the 2026 Country Stampede music festival (held
    annually in late June) and the resale of tickets purchased for live events, sporting events, concerts, and theatre, which are sold
    through various platforms to customers. The decrease primarily reflects a lower volume of primary ticket sales as TicketSmarter focused
    on higher-margin events to improve gross margins.

    ●
    Video
    solutions segment revenue was $229,629 for the three months ended September 30, 2025, compared to $306,245 for the three months ended
    September 30, 2024, a decrease of $76,616 (25.0%). The year-over-year decline reflects continued pressure on product revenue as our
    in-car and body-worn systems face increased competition from newer products with advanced features. In addition, law-enforcement
    revenue decreased due to limited on-hand inventory to fulfill backlog orders, price competition and other competitive actions, and
    adverse marketplace effects related to our recent financial condition. During the first and second quarters of 2025, we restarted
    our product supply chain using proceeds from the February 2025 public equity offering, which we expect will support improved product
    availability and sales during the remainder of 2025.

    ●
    Our
    video solutions operating segment management continues to migrate commercial customers from upfront hardware sales to a recurring
    service-fee model. Accordingly, we expect lower commercial hardware unit sales (principally DVM-250, FLT-250, and portions of our
    body-worn camera line) as customers transition to arrangements in which hardware is provided as part of a monthly subscription. In
    the second quarter of 2020, we launched a subscription plan for body-worn cameras and related equipment that enables law enforcement
    agencies to pay a monthly fee without a significant upfront capital outlay. The program has gained traction, contributing to a mix
    shift from product to service revenue, and we expect this trend to continue, generating recurring revenues over a three- to five-year
    horizon.

Service
and other revenues by operating segment is as follows:

    Three months ended September 30,