Kustom Entertainment, Inc. (formerly Digital Ally, Inc.) reported a total revenue of $13.8 million for the fiscal year ending December 31, 2025, marking a 1.7% increase from $13.5 million in 2024. The revenue was driven by the Entertainment Segment, which generated $8.7 million, up from $7.8 million in the previous year, while the Video Solutions Segment saw a decline in revenue to $5.1 million from $5.8 million. The company recorded a net loss attributable to common stockholders of $6.7 million, an improvement from a loss of $19.8 million in 2024, reflecting a 66.4% reduction in losses.
The company underwent significant operational changes, including the divestiture of its Revenue Cycle Management Segment, which was classified as discontinued operations. This segment was sold on January 8, 2026, for $1.45 million, and its results have been excluded from ongoing financial reporting. The company also implemented a reverse stock split on January 8, 2026, changing its trading symbol from "DGLY" to "KUST" on the Nasdaq Capital Market.
Kustom Entertainment's employee headcount stood at approximately 30 as of December 31, 2025, with 22 employees in the Video Solutions Segment and 8 in the Entertainment Segment. The company has focused on enhancing its recurring revenue through subscription models, particularly in the Video Solutions Segment, which includes cloud-based services and extended warranties. The company reported a total of $8.5 million in deferred revenue as of December 31, 2025, indicating a strong pipeline of future revenue.
Looking ahead, Kustom Entertainment plans to continue its focus on cost-cutting measures and enhancing operational efficiency to restore positive cash flows and profitability. The company has raised significant capital through public and private offerings, totaling approximately $15.7 million in 2025, to support its operations and strategic initiatives. However, management has acknowledged the ongoing challenges in achieving consistent profitability and will need to navigate competitive pressures in both its operating segments.
About DIGITAL ALLY, INC.
Digital Ally, Inc. develops and markets video solutions for law enforcement, security, and commercial applications, including body-worn and in-car digital video systems. The company also provides revenue cycle management services for healthcare organizations and operates an online ticketing marketplace through TicketSmarter. Its core value lies in innovative surveillance technology, integrated software solutions, and diversified services across security, healthcare, and entertainment markets.
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