Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 240

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 8
Chunk 240
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4, an increase of $736,164 (20.3%). Cost of product sold as a percentage
of product revenues for the entertainment segment increased to 151% for the nine months ended September 30, 2025 as compared to 124%
for the nine months ended September 30, 2024.

Cost
of Service Revenue

Overall
cost of service revenue sold for the nine months ended September 30, 2025, and 2024 was $6,821,318 and $6,159,284, respectively, an increase
of $662,035 (10.7%). Overall cost of goods sold for services as a percentage of service revenues for the nine months ended September
30, 2025, and 2024 were 62% and 58%, respectively. Cost of service revenues by operating segment is as follows:

    Nine months ended September 30, 

    2025  
    2024 
  
    Cost of Service Revenues: 

    Video Solutions 
    $986,011  
    $964,412 
  
    Revenue Cycle Management 
     2,616,329  
     2,868,885 
  
    Entertainment 
     3,218,978  
     2,325,987 
  
    Total Cost of Service Revenues 
    $6,821,318  
    $6,159,284 

Cost
of service revenues for the video solutions segment increased slightly, reflecting higher service revenues for the nine months ended
September 30, 2025 compared to the same period in 2024. Cost of service revenues as a percentage of service revenues for the video solutions
segment increased to 33% for the nine months ended September 30, 2025 as compared to 34% for the nine months ended September 30, 2024.

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 remained stable at 63% for the nine months ended September 30, 2025 as compared to 62% for the nine
months ended September 30, 2024.

The
increase in entertainment operating segment cost of service revenues is due to management right sizing the business working towards profitability.
The entertainment segment terminated several unprofitable sponsorships