• La Rosa Reports 91% Year-Over-Year Increase in Revenue to $11.4 Million for the Fourth Quarter of 2023

    Source: Nasdaq GlobeNewswire / 17 Apr 2024 07:00:00   America/New_York

    Acquisition of Six Brokerages Increases the Company’s Gross Profit 207% in Q4 2023 vs Q4 2022

    Revenue Increased 21% to $31.8 Million for Fiscal Year 2023 from 2022

    CELEBRATION, Fla., April 17, 2024 (GLOBE NEWSWIRE) -- 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 fiscal year ended December 31, 2023.

    Key Financial Highlights

    • Total revenue increased 91% year-over-year to $11.4 million for the fourth quarter ended December 31, 2023 from $6.0 million for the fourth quarter ended December 31, 2022
    • Gross profit increased 207% year-over-year for the fourth quarter ended December 31, 2023, compared to the fourth quarter ended December 31, 2022
    • Gross margin increased 321 basis points to 8.5% in the fourth quarter of 2023, compared to 5.3% for the same period last year
    • Total revenue increased 21% to $31.8 million for the year-ended December 31, 2023, compared to $26.2 million for the same period last year
    • Residential real estate services revenue increased $4.0 million to $20.5 million, or 25%, for the year ended December 31, 2023 versus the comparable prior year period
    • Increased transaction fees, monthly agent fees, and annual fees effective September 1, 2023, which, if volume remains consistent, expected to contribute to increased real estate brokerage services revenue in 2024 on top of growth in the broker network

    Q4 2023 Operational Achievements

    • Acquired six real estate brokerage franchisees in the fourth quarter of fiscal year 2023 with combined revenues in excess of $35 million in fiscal year 2022
    • Formed strategic partnership with Final Offer, a negotiation platform delivering transparency in real estate transactions
    • Launched multi-level revenue share plan for agents
    • Opened first office location in Houston, Texas
    • Entered into strategic referral partnership with Janover, an AI-enabled B2B fintech marketplace connecting commercial property borrowers and lenders
    • Launched a proprietary artificial intelligence (“AI”) technology system 'JAEME' to support real estate agents
    • Completed IPO in October 2023, raising gross proceeds of $5.0 million and commenced trading on the Nasdaq Capital Market

    Joe La Rosa, CEO of the Company, commented, “We believe that the past year proved transformative for our Company, highlighted by a successful IPO on the Nasdaq Capital Market, raising $5 million in gross proceeds. This infusion of capital enabled us to accelerate our roll-up strategy, acquiring profitable franchisees and solidifying our market position while creating value for shareholders and clients. Notably, in the fourth quarter alone, we acquired six real estate brokerage franchisees, boasting a combined revenue exceeding $35 million in 2022. As a result, I am pleased to report a 91% year-over-year increase in revenue to $11.4 million for the fourth quarter of 2023 compared to $6.0 million for the fourth quarter of 2022. We expect these acquisitions to contribute meaningfully to our revenue in 2024, and as we integrate these acquisitions, we expect to benefit from improved operating efficiencies and economies of scale.

    “We believe that our approach is both agent and consumer centric. We intend to solidify our position in the highly anticipated paradigm shift in the real estate market. We equip agents with essential resources for success in a technology-driven world while providing consumers with the transparency and value they need. We understand the financial challenges agents face, especially in today's market. That's why we provide new avenues for financial flexibility, offering agents the choice between a 100% commission model or the opportunity to build multiple revenue streams through our revenue share plan.

    “The recent National Association of Realtors' landmark settlement of $418 million is set to profoundly shake up the residential real estate industry. The market is anticipating a significant change in how real estate commissions are set, with estimates modeling for a roughly 30% decrease in commissions paid, a significant reduction to the estimated $100 billion paid each year. We believe, however, that our unique brokerage model positions us well to attract more agents. We recognized the disparity long ago, leading us to create a commission model that was fair to everyone, rewarding the buyer, seller, and agent through a simple-to-understand deal structure. In our view, today, this model positions La Rosa as a leader in the evolving sector, offering unparalleled transparency in real estate transactions.

    “To further enhance our transparency in the market, last month, we officially launched Final Offer, a consumer-facing offer management and negotiation platform for real estate transactions, on our platform in Florida and Georgia. Through Final Offer, our agents will offer clients a streamlined offer and negotiation experience, bringing much-needed transparency to the home buying/selling process. We are excited to expand this platform across all states where we currently operate, including South Carolina, California, New York, Texas, and Puerto Rico, and in states where we may operate in the future.”

    “We anticipate that 2024 will be a year of expansion for us. We believe we are well poised to achieve significant growth and anticipate reaching our annualized revenue run rate target of $100 million by the end of 2024, driven by our accretive roll-up strategy. Moreover, we anticipate reaching profitability in 2025,” concluded Mr. La Rosa.

    Financial Results

    Total revenue for the year ended December 31, 2023, was $31.8 million compared to $26.2 million for the fiscal year ended December 31, 2022. Residential real estate services revenue increased $4.0 million to $20.5 million, or 25%, in the year ended December 31, 2023 versus the comparable prior year period. The increase was driven by $4.6 million of revenue from the six acquisitions completed in the fourth quarter of fiscal year 2023, offset by a 13% decrease in total transaction volume. We increased our transaction fee, monthly agent fee, and annual fee 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 fiscal year ended December 31, 2023 were $4.8 million, compared to $4.3 million for the year ended December 31, 2022. This increase was primarily due to increased payroll and benefits, insurance and training, and public company costs in connection with the Company’s IPO in October 2023, compared to the same period in 2022. Net loss was $7.8 million, or $1.27 basic and diluted loss per share, for the year ended December 31, 2023, compared to net loss of $2.3 million, or $0.39 basic and diluted loss per share, for the year ended December 31, 2022.

    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 headings “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and in other reports and documents we file from time to time with the SEC. 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, LLC
    David Waldman/Natalya Rudman
    Tel: (212) 671-1020
    Email: LRHC@crescendo-ir.com


    La Rosa Holdings Corp. and Subsidiaries
    Consolidated Balance Sheets
     
      December 31,
    2023
      December 31,
    2022
     
           
    Assets      
    Current assets:      
    Cash $959,604  $118,558 
    Restricted cash  1,484,223   1,411,364 
    Accounts receivable, net of reserve for credit losses of $83,456 and $29,039, respectively  826,424   424,549 
    Other current assets     45,000 
    Due from related party     41,558 
    Total current assets  3,270,251   2,041,029 
             
    Noncurrent assets:        
    Property and equipment, net  14,893    
    Right-of-use asset, net  687,570    
    Deferred offering costs     1,760,447 
    Intangible assets, net  4,632,449    
    Goodwill  5,702,612    
    Other long-term assets  21,270   79,314 
    Total noncurrent assets  11,058,794   1,839,761 
    Total assets $14,329,045  $3,880,790 
    Liabilities and Stockholders’ Equity (Deficit)        
    Current liabilities:        
    Line of credit $  $86,163 
    Accounts payable  1,147,073   1,523,936 
    Accrued expenses  227,574   522,279 
    Due to related party, current     652,233 
    Derivative liability     1,022,879 
    Convertible notes payable, net     585,779 
    Advances on future receipts  77,042    
    Accrued acquisition cash consideration  300,000    
    Notes payable, current  4,400   250,788 
    Lease liability, current  340,566    
    Total current liabilities  2,096,655   4,644,057 
             
    Noncurrent liabilities:        
    Note payable, net of current  615,127   360,912 
    Due to related party, net of current     338,757 
    Security deposits payable  1,484,223   1,415,059 
    Lease liability, noncurrent  363,029    
    Other liabilities  2,950    
    Total non-current liabilities  2,465,329   2,114,728 
    Total liabilities  4,561,984   6,758,785 
             
    Stockholders’ equity (deficit):        
    Preferred stock - $0.0001 par value; 50,000,000 shares authorized; 2,000 Series X shares issued and outstanding at December 31, 2023 and December 31, 2022      
    Common stock - $0.0001 par value; 250,000,000 shares authorized; 13,406,480 and 6,000,000 issued and outstanding at December 31, 2023 and December 31, 2022, respectively  1,341   600 
    Additional paid-in capital  18,016,400   1,410,724 
    Accumulated deficit  (12,107,756)  (4,289,319)
    Total stockholders’ equity (deficit) – La Rosa Holdings Corp. Shareholders  5,909,985   (2,877,995)
    Noncontrolling interest in subsidiaries  3,857,076    
    Total stockholders’ equity (deficit)  9,767,061   (2,877,995)
       Total liabilities and stockholders’ equity (deficit) $14,329,045  $3,880,790 


    La Rosa Holdings Corp. and Subsidiaries
    Consolidated Statements of Operations
     
      Year Ended December 31, 
      2023  2022 
    Revenue $31,759,404  $26,203,921 
             
    Cost of revenue  28,918,236   23,678,819 
             
    Gross profit  2,841,168   2,525,102 
             
    Operating expenses:        
    Sales and marketing  359,717   415,770 
    General and administrative  4,473,340   3,883,856 
    Stock-based compensation — general and administrative  5,100,474   230,664 
    Total operating expenses  9,933,531   4,530,290 
             
    Loss from operations  (7,092,363)  (2,005,188)
             
    Other income (expense)        
    Interest expense, net  (140,382)  (144,268)
    Amortization of financing fees  (1,016,644)  (349,913)
    Change in fair value of derivative liability  138,985   (120,599)
    Forgiveness of debt     149,312 
    Other income, net  286,641    
    Loss before provision for income taxes  (7,823,763)  (2,470,656)
    Benefit from income taxes     (150,000)
    Net loss  (7,823,763)  (2,320,656)
    Less: Net loss attributable to noncontrolling interests in subsidiaries  (5,326)   
    Net loss after noncontrolling interest in subsidiaries  (7,818,437)  (2,320,656)
    Less: Deemed dividend  1,472,514    
    Net loss attributable to common stockholders $(9,290,951) $(2,320,656)
             
    Loss per share of common stock attributable to common stockholders        
    Basic and diluted $(1.27) $(0.39)
             
    Weighted average shares used in computing net loss per share of common stock attributable to common stockholders        
    Basic and diluted  7,293,033   6,000,000 


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