La Rosa Holdings Corp. (NASDAQ: LRHC) (“La Rosa” or the
“Company”), a holding company for five agent-centric,
technology-integrated, cloud-based, multi-service real estate
segments, today provided a business update and reported financial
results for the first quarter ended March 31, 2024.
Q1 2024 Key Financial
Highlights
- Total revenue increased 117%
year-over-year to $13.1 million for the first quarter ended March
31, 2024 from $6.0 million for the first quarter ended March 31,
2023
- Residential real estate services
revenue increased $6.9 million to $10.2 million, or 211%, for the
first quarter ended March 31, 2024, versus the comparable prior
year period
- Increased transaction fees, monthly
agent fees, and annual fees effective September 1, 2023, which, if
volume remains consistent, are expected to contribute to increased
real estate brokerage services revenue in 2024 on top of growth in
the broker network
Q1 2024 Operational Achievements and
Subsequent Events
- Acquired three real estate
brokerage franchisees in the first quarter of 2024
- Opened office in the Tampa Bay Area
in January
- Officially launched Final Offer, a
transparent negotiation platform, in Florida and Georgia in March
with plans to expand the offering across the organization
- Acquired tenth real estate
brokerage franchisee in April with revenue of $4.7 million and
positive net income in 2023
Joe La Rosa, CEO of the Company, commented, “We
continue to execute on our roll-up strategy, primarily focused on
acquiring profitable franchisees. In the first quarter of 2024, we
successfully acquired three real estate brokerage franchisees,
building upon the six acquisitions made in the fourth quarter of
2023. As a result, we achieved a 117% year-over-year increase in
revenue compared to the same period in 2023. Last month, we
completed our acquisition of the tenth real estate brokerage
franchisee, with revenue of $4.7 million and positive net income in
2023. With 162 agents, this brokerage solidified its position as
the second largest in agent count and the third largest in real
estate sales in Polk County, Florida in 2023. As we continue to
acquire profitable franchisees, we expect them to meaningfully
contribute to our revenue throughout 2024. Our target is to achieve
an annualized revenue run rate of $100 million by the end of 2024,
with profitability anticipated in 2025. Through the integration of
these acquisitions, we anticipate benefitting from improved
operating efficiencies and economies of scale to further enhance
our margins.
“We believe we are disrupting the real estate
industry by offering agents the option of a revenue share model or
an annual fee-based model with 100% agent commissions. As we
continue to expand and open new offices nationwide, such as our new
Tampa office, we anticipate that our distinct brokerage model will
draw in more agents, thus reinforcing our competitive standing in
the market and propelling us towards sustainable long-term growth
and profitability,” concluded Mr. La Rosa.
Financial Results
Total revenue for the first quarter ended March
31, 2024, was $13.1 million compared to $6.0 million for the first
quarter ended March 31, 2023. Residential real estate services
revenue increased $6.9 million to $10.2 million, or 211%, in the
first quarter ended March 31, 2024, versus the comparable prior
year period. The increase was driven by $7.6 million of revenue
from the six acquisitions completed in the fourth quarter of fiscal
year 2023 and the three acquisitions completed in the first quarter
of fiscal year 2024, offset by a 36% decrease in total transaction
volume. We increased our transaction fees, monthly agent fees, and
annual fees effective September 1, 2023, which, if volume remains
consistent, we anticipate our real estate brokerage services
revenue will increase in 2024. Selling, general and administrative
costs, excluding stock-based compensation, for the first quarter
ended March 31, 2024, were $2.6 million, compared to $1.0 million
for the first quarter ended March 31, 2023. Half of this increase
was driven by $804,000 of additional costs from the nine
acquisitions we completed since the Company’s IPO in October 2023
in addition to increased payroll and benefits, insurance and
training, and public company costs in connection with the IPO,
compared to the same period in 2023. Net loss was $4.7 million, or
$(0.35) basic and diluted loss per share, for the first quarter
ended March 31, 2024, compared to net loss of $1.0 million, or
$(0.16) basic and diluted loss per share, for the first quarter
ended March 31, 2023.
About La Rosa Holdings
Corp.
La Rosa Holdings Corp. (Nasdaq: LRHC) is a
holding company for five agent-centric, technology-integrated,
cloud-based, multi-service real estate segments. In addition to
providing person-to-person residential and commercial real estate
brokerage services to the public, the Company cross-sells ancillary
technology-based products and services primarily to its sales
agents and the sales agents associated with their franchisees. La
Rosa’s business is organized based on the services they provide
internally to their agents and to the public, which are residential
and commercial real estate brokerage, franchising, real estate
brokerage education and coaching, and property management.
For more information, please visit:
https://www.larosaholdings.com.
Stay connected with La Rosa, sign up for news
alerts here: larosaholdings.com/email-alerts.
Forward-Looking Statements
This press release contains forward-looking
statements regarding the Company’s current expectations that are
subject to various risks and uncertainties. Such statements include
statements regarding the Company’s ability to grow its business and
other statements that are not historical facts, including
statements which may be accompanied by the words “intends,” “may,”
“will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,”
“estimates,” “aims,” “believes,” “hopes,” “potential” or similar
words. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and
assumptions that are difficult to predict. Actual results could
differ materially from those described in these forward-looking
statements due to certain factors, including without limitation,
the Company's ability to achieve profitable operations, customer
acceptance of new services, the demand for the Company’s services,
the Company’s customers' economic condition, the impact of
competitive services and pricing, general economic conditions, the
successful integration of the Company’s past and future acquired
brokerages, the effect of the recent National Association of
Realtors' landmark settlement on our business operations, and other
risk factors detailed in the Company's filings with the United
States Securities and Exchange Commission (the "SEC”). You are
urged to carefully review and consider any cautionary statements
and other disclosures, including the statements made under the
heading “Risk Factors” in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2023, and other reports and
documents we file from time to time with the SEC, including our
Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 2024. Forward-looking statements contained in this press
release are made only as of the date of this press release. La Rosa
does not undertake any responsibility to update any forward-looking
statements in this release, except as may be required by applicable
law. References and links to websites have been provided as a
convenience, and the information contained on such websites has not
been incorporated by reference into this press release.
For more information, contact:
info@larosaholdings.com
Investor Relations
Contact:Crescendo Communications, LLCDavid Waldman/Natalya
RudmanTel: (212) 671-1020 Email: LRHC@crescendo-ir.com
(Tables follow)
La Rosa Holdings Corp. and
SubsidiariesCondensed Consolidated Balance
Sheets |
|
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
|
|
(unaudited) |
|
|
(audited) |
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash |
|
$ |
1,079,161 |
|
|
$ |
959,604 |
|
Restricted cash |
|
|
1,604,377 |
|
|
|
1,484,223 |
|
Accounts receivable, net of allowance for credit losses of $99,443
and $83,456, respectively |
|
|
825,710 |
|
|
|
826,424 |
|
Total current assets |
|
|
3,509,248 |
|
|
|
3,270,251 |
|
|
|
|
|
|
|
|
|
|
Noncurrent assets: |
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
13,408 |
|
|
|
14,893 |
|
Right-of-use asset, net |
|
|
983,230 |
|
|
|
687,570 |
|
Intangible assets, net |
|
|
5,178,761 |
|
|
|
4,632,449 |
|
Goodwill |
|
|
6,568,225 |
|
|
|
5,702,612 |
|
Other long-term assets |
|
|
19,854 |
|
|
|
21,270 |
|
Total noncurrent assets |
|
|
12,763,478 |
|
|
|
11,058,794 |
|
Total assets |
|
$ |
16,272,726 |
|
|
$ |
14,329,045 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,597,529 |
|
|
$ |
1,147,073 |
|
Accrued expenses |
|
|
234,780 |
|
|
|
227,574 |
|
Contract liabilities |
|
|
164,767 |
|
|
|
— |
|
Derivative liability |
|
|
122,300 |
|
|
|
— |
|
Advances on future receipts |
|
|
— |
|
|
|
77,042 |
|
Accrued acquisition cash consideration |
|
|
255,000 |
|
|
|
300,000 |
|
Notes payable, current |
|
|
662,190 |
|
|
|
4,400 |
|
Lease liability, current |
|
|
406,162 |
|
|
|
340,566 |
|
Total current liabilities |
|
|
3,442,728 |
|
|
|
2,096,655 |
|
|
|
|
|
|
|
|
|
|
Noncurrent liabilities: |
|
|
|
|
|
|
|
|
Note payable, net of current |
|
|
646,926 |
|
|
|
615,127 |
|
Security deposits payable |
|
|
1,604,377 |
|
|
|
1,484,223 |
|
Lease liability, noncurrent |
|
|
591,609 |
|
|
|
363,029 |
|
Other liabilities |
|
|
2,950 |
|
|
|
2,950 |
|
Total non-current liabilities |
|
|
2,845,862 |
|
|
|
2,465,329 |
|
Total liabilities |
|
|
6,288,590 |
|
|
|
4,561,984 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock - $0.0001 par value; 50,000,000 shares authorized;
2,000 Series X shares issued and outstanding at March 31, 2024 and
December 31, 2023, respectively |
|
|
— |
|
|
|
— |
|
Common stock - $0.0001 par value; 250,000,000 shares authorized;
14,252,716 and 13,406,480 issued and outstanding at March 31, 2024
and December 31, 2023, respectively |
|
|
1,425 |
|
|
|
1,341 |
|
Additional paid-in capital |
|
|
22,283,884 |
|
|
|
18,016,400 |
|
Accumulated deficit |
|
|
(16,706,552 |
) |
|
|
(12,107,756 |
) |
Total stockholders’ equity – La Rosa Holdings Corp.
shareholders |
|
|
5,578,757 |
|
|
|
5,909,985 |
|
Noncontrolling interest in subsidiaries |
|
|
4,405,379 |
|
|
|
3,857,076 |
|
Total stockholders’ equity |
|
|
9,984,136 |
|
|
|
9,767,061 |
|
Total liabilities and stockholders’ equity |
|
$ |
16,272,726 |
|
|
$ |
14,329,045 |
|
|
|
|
|
|
|
|
|
|
La Rosa Holdings Corp. and
SubsidiariesCondensed Consolidated Statements of
Operations(unaudited) |
|
|
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
2023 |
|
Revenue |
|
$ |
13,088,899 |
|
|
$ |
6,041,636 |
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
|
11,926,902 |
|
|
|
5,413,926 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
1,161,997 |
|
|
|
627,710 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
232,727 |
|
|
|
91,378 |
|
General and administrative |
|
|
2,321,855 |
|
|
|
883,261 |
|
Stock-based compensation — general and administrative |
|
|
3,191,138 |
|
|
|
69,314 |
|
Total operating expenses |
|
|
5,745,720 |
|
|
|
1,043,953 |
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(4,583,723 |
) |
|
|
(416,243 |
) |
Other income (expense) |
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(20,252 |
) |
|
|
(92,133 |
) |
Amortization of debt discount |
|
|
(56,003 |
) |
|
|
(592,620 |
) |
Change in fair value of derivative liability |
|
|
(5,000 |
) |
|
|
111,478 |
|
Other income, net |
|
|
— |
|
|
|
567 |
|
Loss before provision for
income taxes |
|
|
(4,664,978 |
) |
|
|
(988,951 |
) |
Benefit from income taxes |
|
|
— |
|
|
|
— |
|
Net loss |
|
|
(4,664,978 |
) |
|
|
(988,951 |
) |
Less: Net loss attributable to noncontrolling interests in
subsidiaries |
|
|
(66,182 |
) |
|
|
— |
|
Net loss after noncontrolling
interest in subsidiaries |
|
|
(4,598,796 |
) |
|
|
(988,951 |
) |
Less: Deemed dividend |
|
|
230,667 |
|
|
|
— |
|
Net loss attributable to
common stockholders |
|
$ |
(4,829,463 |
) |
|
$ |
(988,951 |
) |
Loss per share of common stock
attributable to common stockholders |
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.35 |
) |
|
$ |
(0.16 |
) |
|
|
|
|
|
|
|
|
|
Weighted average shares used
in computing net loss per share of common stock attributable to
common stockholders |
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
13,672,655 |
|
|
|
6,002,578 |
|
|
|
|
|
|
|
|
|
|
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