Company: LRHC
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032211
Chunk: 80

Company: La Rosa Holdings Corp.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 80
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 Set forth below is a brief discussion of the key factors impacting our
results of operations.

Seasonality

Our business is affected by
the seasons and weather. The spring and summer seasons, when school is out, have typically resulted in higher sales volumes compared to
fall and winter seasons. With the slowdown in the later months, we have experienced slower listing activity, fewer transaction closings
and lower revenues and have seen more agent turnover as well. Bad weather or natural disasters also negatively impact listings and sales
which reduces our operating income, net income, operating margins and cash flow. While this pattern is fairly predictable, there can be
no assurance that it will continue. Moreover, with the impact of climate change, we expect more business disruptions in the coming years,
many of which could be unpredictable and extreme.

Our revenues and operating
margins will fluctuate in successive quarters due to a wide variety of factors, including seasonality, weather, health exigencies, holidays,
national or international emergencies, the school year calendar’s impact on timing of family relocations, and changes in mortgage
interest rates. This fluctuation may make it difficult to compare or analyze our financial performance effectively across successive quarters. 

Inflation and Market Interest Rates

The U.S. Federal Reserve continues
to take action intended to address inflation. The Federal Reserve Board maintained the federal funds rate at 533 basis points from August
of 2023 through mid-September 2024, when it was reduced to 483 basis points. In February 2025, the federal funds rate was 433 basis points.
The fluctuations impact interest rates, which significantly contribute to mortgage rate adjustments. During the second half of 2022, the
benchmark 30 year fixed conforming mortgage rate rose above 6% for the first time since 2008, according to Freddie Mac data,
and reached a peak of about 8% during the second half of 2023. That interest rate sat in between 6.62% and 6.85% during 2024. Consequently,
housing demand remained soft, prices are rising, consumer sentiment has weakened, and home sales are declining. In February 2025, the
existing home sales market decreased 1.2% compared to February 2024 according to the NAR. This decline had an adverse impact on consumer
demand for our services, as consumers weighed the financial implications of selling or purchasing a home. Continuing poor housing market
conditions would adversely affect our operating performance and results of operations