Company: FOXX
Filing Date: 2025-11-18
Form Type: 10-Q
Source: 0001213900-25-112192
Chunk: 149

Company: Foxx Development Holdings Inc.
Filing Date: 2025-11-18
Form: 10-Q
Item: Item 8
Chunk 149
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 for
mobile phones increased from 0.7% for the three months ended September 30, 2024 to 13.0% for the same period in 2025. This was primarily
due to the increasing sales in new phone models with higher gross profit margins and the reduction of shipping and tariff costs as
we negotiated with our vendor to cover such costs.

For the three months ended
September 30, 2025, our gross profit percentage of wearable products was 1.2%. We did not sell wearable products for the three months
ended September 30, 2024.

For the three months ended
September 30, 2025 and 2024, our gross profit percentage of App service commission was 100.0%. This high margin was primarily attributable
to the nature of App service commission revenue, which was commission based revenue that was earned at a point in time when the revenue
is generated from the App, that is when clicks and/or impressions, activation of Apps, and installation of additional Apps occur at a
point in time when the end users of the mobile devices interact with those Apps. We earned the App revenue share (service commission)
from our partners without incurring any direct cost, as the pre-installation expenses were included in the research and development expenses
prior to installation, and any labor costs with minimal time spent were immaterial to be allocated to cost of revenue.

For the three months ended
September 30, 2025, our gross profit percentage of other services was 81.0%. We did not have  other logistic and warehouse management
services for the three months ended September 30, 2024. 

Operating Expenses

Total operating expenses
increased by approximately $1.4 million, or 64.8%, to approximately $3.6 million for the three months ended September 30, 2025, from approximately
$2.2 million for the three months ended September 30, 2024.

Our operating expenses are
summarized as follows:

    For the Three Months ended September 30, 

    2025  
    2024  
    Change ($)  
    Change  (%) 

    (Unaudited)  
    (Unaudited)  

    Operating expenses 

    Selling expenses 
    $901,656  
    $1,215,042  
    $(313,386) 
     (25.8)%