Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 290

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 2
Chunk 290
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 it focuses on higher margin events to improve its gross margins.

    ●
    The
    Company’s video segment operating segment generated revenues totaling $721,992 during the nine months ended September 30, 2025
    compared to $1,648,373 for the nine months ended September 30, 2024. In general, our video solutions operating segment has experienced
    pressure on its product revenues as our in-car and body-worn systems are facing increased competition because our competitors have
    released new products with advanced features. Additionally, our law enforcement revenues declined compared to the same period in
    2024 due to the Company not having inventory in–stock to fulfill existing backlog orders, price-cutting and competitive actions
    by our competitors and adverse marketplace effects related to our recent financial condition. During the first three quarters of
    2025, we restarted our product supply chain using proceeds from the February 2025 public equity offering. We expect improved product
    availability to support higher video solutions product sales in the fourth quarter of 2025.

    ●
    Our
    video solutions operating segment management has continued to focus on migrating commercial customers, from a hardware sale to a
    service fee model. Therefore, we expect a reduction in commercial hardware sales (principally DVM-250’s, FLT-250’s, and
    a portion of our body-worn camera line) as we convert these customers to a service model under which we provide the hardware as part
    of a monthly recurring service fee. In that respect, we introduced a monthly subscription agreement plan for our body worn cameras
    and related equipment during the second quarter of 2020 that allowed law enforcement agencies to pay a monthly service fee to obtain
    body worn cameras without incurring a significant upfront capital outlay. This program has gained some traction, resulting in decreased
    product revenues and increasing our service revenues. We expect this program to continue to hold traction, resulting in recurring
    revenues over a span of three to five years.

Service
and other revenues by operating segment is as follows:

    Nine months ended September 30, 

    2025  
    2024 
  
    Service and Other Revenues: 

    Video Solutions 
    $2,987,182  
    $2,851,952 
  
    Revenue Cycle Management 
     4,144,008  
     4,600,745 
  
    Entertainment 
     3