Company: LRHC
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001213900-25-078012
Chunk: 137

Company: La Rosa Holdings Corp.
Filing Date: 2025-08-18
Form: 10-Q
Item: Item 2
Chunk 137
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with overall home sale transaction activity. We believe that the number of agents and those that produce commissions in our network is
the primary statistic that drives our revenue. Another major factor is the cyclicality of the real estate industry that has peaks and
valleys depending on macroeconomic conditions that we cannot control. And finally, our revenues fluctuate based on the changes in the
aggregate fee revenue per sales agent as a significant portion of our revenue is tied to various fees that are ultimately tied to the
number of agents, including annual dues, continuing franchise fees, and certain transaction or service-based fees. Our revenue per agent
also increases in other ways including when transaction sides and transaction sizes increase since a portion of our revenue comes from
fees tied to the number and size of real estate transactions closed by our agents. While the Company was not named as a defendant in
any of the recent class action lawsuits alleging antitrust violations, it is possible that it could be a litigant at some point in the
future. Several of these lawsuits have been settled (see our Annual Report on Form 10-K for 2024 fiscal year “Risk Factors –
Adverse outcomes in litigation and regulatory actions against the NAR, other real estate brokerage companies and agents in our industry
could adversely impact our financial results). These settlements will result in changes in the way real estate brokers
are compensated for their services. Most notably, home sellers will no longer be required to pay buyer agent commissions which will result
in lower buyer agent compensation. We cannot predict the full breadth of the outcome of these lawsuits but believe that they will result
in a significant adverse effect on our financial condition and results of operations for the foreseeable future. 

Key factors affecting our performance

As a result of a number of factors, our historical
results of operations may not be comparable to our results of operations in future periods, and our results of operations may not be
directly comparable from period to period. 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