Company: LRHC
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032211
Chunk: 1445

Company: La Rosa Holdings Corp.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 4
Chunk 1445
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 margin of 8.2%.

Franchising Services

The Company uses external
software that supports the Company’s franchises, which is directly used to manage real estate transactions that generates revenue.
The software is classified as a cost of revenue, and the Company expects to continue to use the software for a significant portion of
2025, with internally developed options coming online in the latter half of 2025. The decrease in cost of franchising revenue is due to
the six acquisitions from 2023 and six from 2024, which no longer contribute to the cost of franchising revenue, as well as a reduction
of price per usage of the software costs based on our review of usage of the software in 2023. The gross profit decreased $570 thousand,
or 138.7%, from 2023 to 2024 primarily attributable to the reduction in the cost of revenue.

Coaching Services

Costs related to coaching
services decreased $20 thousand, or 6.1%, in the year ended December 31, 2024 against the comparable prior year period. Costs related
to coaching services moved proportionally with the change in related revenue. Gross profit decreased by $40 thousand, or 13.5%, due to
new initiatives to drive recruiting which impacted coaching programs.

Property Management

Costs related to property
management services increased $1.424 million, or 15.2%, in the year ended December 31, 2024 against the comparable prior year period.
The increase in property management costs were primarily related to the increase in properties under management. The gross margin is consistent
from 2023 to 2024.

46

Selling, General and Administrative Expense

    Year Ended December 31,  
    Change 

    2024  
    2023  
    $  
    % 
  
    Sales and Marketing 
    $1,007,077  
    $359,717  
    $647,360  
     180%
  
    Payroll and benefits 
     4,339,402  
     2,436,888  
     1,902,514  
     78%
  
    Rent and other 
     1,070,708  
     346,281  
     724,427  
     209%
  
    Professional fees 
     1,594,262  
     260,105  
     1,334,157