Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 279

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 2
Chunk 279
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2024 were $4,537,157 and $4,051,711, respectively, an increase of $485,446
(12.0%) due to the reasons noted above.

Cost
of Product Revenue

Overall
cost of product revenue sold for the three months ended September 30, 2025, and 2024 was $905,190 and $547,562, respectively, an increase
of $482,610 (19.9%). Overall cost of goods sold for products as a percentage of product revenues for the three months ended September
30, 2025, and 2024 were 179% and 155%, respectively. Cost of products sold by operating segment is as follows:

    Three Months Ended September 30, 

    2025  
    2024 
  
    Cost of Product Revenues: 

    Video Solutions 
    $476,667  
    $157,336 
  
    Revenue Cycle Management 
     —  
     — 
  
    Entertainment 
     428,523  
     390,226 
  
    Total Cost of Product Revenues 
    $905,190  
    $547,562 

The
increase in cost of goods sold for our video solutions segment was primarily attributable to a higher component and expedite freight
costs, increased repair and refurbishment costs for returned units, and increased scrap – receiving associated with incoming inspection
failures as compared to the same period in the prior year. Cost of product sold as a percentage of product revenues for the video solutions
segment increased to 207.6% for the three months ended September 30, 2025 as compared to 51% for the three months ended September 30,
2024.

Cost
of products sold within the entertainment segment increased slightly period over period, principally due to higher variable costs (ticket
acquisition, event settlement, and payment processing). The increase was partially offset by a continued focus on higher-margin events,
which limited cost growth as a percentage of revenue. Cost of product sold as a percentage of product revenues for the entertainment
segment increased to 98.6% for the three months ended September 30, 2025 as compared to 78.40% for the three months ended September 30,
2024.

Cost
of Service Revenue

Overall
cost of service revenue sold for the three months ended September 30, 2025, and 2024 was $2,260,392