La Rosa Reports 117% Year-Over-Year Increase in Revenue to $13.1 Million for the First Quarter of 2024
La Rosa Holdings (NASDAQ: LRHC) reported a 117% increase in revenue year-over-year for Q1 2024, totaling $13.1 million. Residential real estate services revenue surged by 211% to $10.2 million. The company successfully acquired three brokerage franchisees in Q1 2024 and an additional franchisee in April. The acquisitions are expected to drive further revenue growth, targeting $100 million annualized by the end of 2024. Operational achievements include launching a transparent negotiation platform and opening a new office in Tampa Bay. However, the company also reported a net loss of $4.7 million for Q1 2024, up from $1.0 million in Q1 2023.
- 117% increase in total revenue year-over-year to $13.1 million.
- Residential real estate services revenue increased by 211% to $10.2 million.
- Acquisition of three brokerage franchisees in Q1 2024.
- Additional franchisee with $4.7 million revenue acquired in April.
- Launch of transparent negotiation platform in Florida and Georgia.
- Opened a new office in Tampa Bay in January.
- Targeting $100 million annualized revenue by end of 2024.
- Net loss of $4.7 million for Q1 2024, up from $1.0 million in Q1 2023.
- Increased selling, general, and administrative costs to $2.6 million from $1.0 million in Q1 2023.
- 36% decrease in total transaction volume despite acquisitions.
- Increased costs linked to acquisitions and IPO-related expenses.
Insights
La Rosa Holdings Corp. has exhibited a robust 117% increase in revenue year-over-year to
However, despite the aggressive growth strategy, the company reported a net loss of
Key considerations for investors include the company's ability to manage and integrate its acquisitions profitably. An additional concern is the sustainability of this growth model if the housing market cools or if the company faces operational challenges. Investors should monitor La Rosa's ability to scale efficiently and turn around to profitability as targeted in 2025.
La Rosa's acquisitions of ten brokerages since its IPO highlight its aggressive roll-up strategy in the real estate sector. The company's model of offering both revenue share and 100% commission options to agents indicates an attempt to disrupt traditional brokerage models. This approach could attract more agents if they perceive higher earnings potential and flexibility.
The 36% decrease in transaction volume might be a red flag, indicating market volatility or integration issues. However, La Rosa's expansion strategy, particularly the opening of new offices in high-demand areas like the Tampa Bay Area, could mitigate this risk by tapping into new markets and diversifying revenue streams.
Overall, investors should consider the potential long-term benefits of La Rosa’s disruptive model and geographic expansion, balanced against short-term operational risks and industry fluctuations.
From an industry perspective, La Rosa's performance is noteworthy given the heightened competition in the real estate market. The 211% rise in residential real estate services revenue is impressive, particularly when juxtaposed with the sector’s challenges, such as fluctuating housing demand and interest rate uncertainties.
The acquisition of profitable brokerage franchisees is a strategic move to bolster market presence and scale. The launch of their transparent negotiation platform, Final Offer, is an innovative step likely to enhance transaction efficiency and attract tech-savvy consumers and agents.
Nevertheless, the net loss raises questions about operational efficiency post-acquisition. Investors should watch how La Rosa leverages economies of scale to improve margins and achieve profitability by 2025 as projected. The company’s target to hit an annualized revenue run rate of
Successfully Acquires Ten Brokerages Since Company’s IPO in October 2023
Residential Real Estate Services Revenue Increased
CELEBRATION, Fla., May 16, 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 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 , or211% , 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
“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
Financial Results
Total revenue for the first quarter ended March 31, 2024, was
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, LLC
David Waldman/Natalya Rudman
Tel: (212) 671-1020
Email: LRHC@crescendo-ir.com
(Tables follow)
| La Rosa Holdings Corp. and Subsidiaries Condensed 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 | 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 - | — | — | ||||||
| Common stock - | 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 Subsidiaries Condensed 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 | ||||||
FAQ
What was La Rosa's revenue for Q1 2024?
How much did La Rosa's residential real estate services revenue increase in Q1 2024?
How many brokerage franchisees did La Rosa acquire in Q1 2024?
What was La Rosa's net loss for Q1 2024?
What new platform did La Rosa launch in Q1 2024?
What is La Rosa's revenue target by the end of 2024?
What was the increase in selling, general, and administrative costs for La Rosa in Q1 2024?
