Syra Health Announces Second Quarter 2024 Financial Results, Led by Strong Revenue Growth of 101%

Rhea-AI Summary

Syra Health Corp. (NASDAQ: SYRA) reported strong Q2 2024 financial results, with revenue growing 101% to $2.0 million compared to Q2 2023. Key highlights include:

- Gross margins increased 468 basis points year-over-year
- High-margin business units, including Population Health, grew 347% and comprised 28% of total revenues
- Population Health saw a 276% increase driven by demand for data analytics
- Cash balance of $1.6 million with no long-term debt

Recent operational highlights include being named a subcontractor for a $43 billion DHA contract vehicle and securing a $5.8 million Indiana health education contract. Syra Health is now active in 23 states and has successfully implemented its AI-backed mental health app, Syrenity, for two employers.

Positive

• Revenue grew 101% year-over-year to $2.0 million in Q2 2024
• Gross margins increased 468 basis points compared to Q2 2023
• High-margin business units, including Population Health, grew 347% and now comprise 28% of total revenues
• Population Health segment saw a 276% increase in Q2 2024
• Secured a subcontractor position on a $43 billion DHA contract vehicle
• Won a four-year, $5.8 million statewide health education contract in Indiana
• Expanded operations to 23 states across the nation
• Successfully implemented Syrenity, an AI-backed mental health app, for two employers

Negative

• Net loss increased to $(1.4 million) in Q2 2024 from $(802,800) in Q2 2023
• Total operating expenses increased to $1.7 million from $912,113 in Q2 2023
• Adjusted EBITDA loss widened to $(1.3 million) from $(771 thousand) in Q2 2023

Insights

Financial Analyst

Syra Health's Q2 2024 results show strong revenue growth but widening losses. Revenue doubled to $2.0 million, driven by a 276% increase in Population Health and 66% growth in Healthcare Workforce. However, net loss expanded to $(1.4 million) from $(802,800) year-over-year.

The 468 basis point improvement in gross margin to 17.8% is positive, reflecting a shift towards higher-margin services. Yet, operating expenses surged by 86%, outpacing revenue growth. The company's cash position of $1.6 million with no long-term debt provides some financial flexibility, but cash burn is a concern given the widening losses.

Planned cost-cutting measures, including a 25% reduction in executive pay, are important for improving profitability. The company's expansion to 23 states and entry into federal contracts show promise, but execution and cost management will be key to achieving sustainable growth.

Healthcare Industry Analyst

Syra Health's diversification strategy is showing traction, particularly in high-margin segments like Population Health, which now comprises 28% of total revenues, up from 13% last year. The company's AI-backed mental health app, Syrenity, represents a promising venture into the burgeoning digital health space.

The subcontractor role in the $43 billion Defense Health Agency contract and the $5.8 million Indiana health education contract are significant wins. These long-term contracts provide revenue visibility and potential for scaling operations. However, the healthcare staffing market remains competitive and Syra's ability to differentiate its offerings will be crucial.

The focus on data analytics and state health department initiatives aligns well with the industry's shift towards value-based care and population health management. This positioning could drive further growth if Syra can effectively leverage its expanding geographical presence and diverse service portfolio.

Tech Innovation Expert

Syra Health's investment in R&D, amounting to $277,548 this quarter, signals a commitment to technology-driven solutions. The Syrenity mental health app, leveraging AI, is a standout innovation that could be a significant differentiator in the crowded digital health market.

The company's expansion into digital health, generating $92,250 in revenue from a zero base last year, is promising. However, this segment's contribution remains small at about 4.6% of total revenue. To justify the R&D spend and capitalize on the digital health trend, Syra needs to accelerate adoption and scaling of its tech solutions.

The focus on data analytics in Population Health aligns with the industry's move towards data-driven decision-making. However, Syra must ensure its tech investments translate into tangible competitive advantages and improved operational efficiencies to offset the current increase in operating expenses.

Conference call will be held today, Thursday, August 8 at 9:00 am ET

CARMEL, Ind., Aug. 8, 2024 /PRNewswire/ -- Syra Health Corp. (NASDAQ: SYRA), ("Syra Health" or the "Company") a healthcare technology company powering better health by providing meaningful solutions, announced today its financial results for the second quarter ended June 30, 2024.

Q2 2024 Financial Highlights

• Revenue of $2.0 million in 2Q24 compared to $1.0 million in 2Q23.
• Gross margins in 2Q24 increased 468 basis points compared to 2Q23.
• High-margin business units, including Population Health, grew 347% and comprised 28% of total revenues in 2Q24, versus only 13% in 2Q23.
• Population Health, driven by the demand for data analytics and evaluation of state health department initiatives, saw an increase of 276% in 2Q24 compared to 2Q23.
• Cash balance of $1.6 million and no long-term debt.

Recent Operational Highlights

• Announced as a subcontractor for a healthcare workforce contract vehicle awarded to LUKE by the Defense Health Agency (DHA), to provide medical staffing services at DHA facilities across the country. This contract vehicle has a term of 10 years and a ceiling value of $43 billion.
• Secured a four-year, $5.8 million statewide health education and training contract with Indiana Family and Social Services to train home and community support professionals.
• Currently has active contracts in 23 states across the nation.
• Awarded a population health contract by the Wyoming Department of Health, Behavioral Health Division to assess emergency preparedness plans.
• Delivered our fourth training to Maricopa County Department of Public Health.
• Secured a statewide nursing contract with the North Carolina Department of Public Safety.
• Successfully implemented its propriety, AI-backed, mental health app, Syrenity, for two employers.

Management Commentary

Dr. Deepika Vuppalanchi, CEO, Syra Health, said "Our momentum has accelerated into the second quarter, where we achieved a 101% increase in our revenues. Our focus on higher-margin business units is proving successful, expanding our client base and diversifying our revenue streams. We are currently operating in 23 states in contrast to a handful of states a year ago. Our recent entry into the Federal Government sector is promising, with Syra Health now serving as subcontractors on contracts from the Health and Human Services (HHS) and DHA, and we expect to receive initial task orders in 2024. As anticipated, our legacy Healthcare Workforce business unit has continued to grow driven by new customers and contract extensions. The numerous contract wins across our business units announced in recent months are set to take effect in the latter half of 2024 and extend into 2025 and beyond. Additionally, our innovative AI-based mental health product, Syrenity, is generating significant interest and shows tremendous potential to transform the mental health space. We are committed to driving revenue growth while enhancing operational efficiencies to establish Syra Health as a leader in healthcare solutions."

Q2 2024 Financial Results

Revenue for the quarter ended June 30, 2024, was $2.0 million, compared to the $1.0 million reported in the second quarter of 2023. Strong growth was driven by Population Health which grew 276% year over year, and Healthcare Workforce, which grew 66% year over year. Digital Health had revenues of $92,250, compared to zero last year.

Gross profit margin in the second quarter of 2024 was 17.8%, compared to 13.1% in the second quarter of 2023. The 468-basis point increase in gross margins was due to a mix shift toward population health which carries higher margins and increased operational efficiency.

Total operating expenses for the second quarter of 2024 were $1.7 million compared to $912,113 in the second quarter of 2023. This temporary increase was driven by strategic investments in product development and corporate branding to drive future growth. However, we are committed to improving efficiency and managing costs more effectively.

Salaries and benefits expenses increased 51% due to increased operations and added office personnel to support the Company's growth. Professional fees increased 10% due to increased legal and other professional costs related to the Company's regulatory filings. Selling, general, and administrative expenses increased 110% due to increased operations. Depreciation expense was $12,574 compared to $12,293 in the second quarter of 2023, reflecting expanded office space and additional office equipment. R&D expenses were $277,548, reflecting the development of technology-based solutions.  

Net Loss for the second quarter of 2024 was $(1.4 million) compared to $(802,800) in the second quarter of 2023.

Adjusted EBITDA for the second quarter 2024 was $(1.3 million) compared to $(771 thousand) in the second quarter 2023.

Cash on hand on June 30, 2024, was $1.6 million.

Starting in the third quarter of 2024, we anticipate a reduction in operating expenses as a result of several key initiatives. We have recently streamlined our operations and optimized our workforce, leading to improvements in our cost structure. Additionally, we have implemented a 25% reduction in executive pay, which is part of our broader cost-saving strategy. These measures are designed to enhance operational efficiency and ensure that we continue to operate within a disciplined financial framework.

Conference Call

Management will hold a conference call to discuss the fiscal year's financial results at 9:00 am ET on August 8, 2024.

Interested parties can listen via a live webcast, from the link available in the Investor Relations section of the Company's website at  http://www.syrahealth.com/ir/presentations/q2-2024-earnings-call.

A replay will be available after the call, in the Investor Relations section of the Company's website at http://www.syrahealth.com/ir/presentations/q2-2024-earnings-call.

Non-GAAP Financial Measures

In addition to financial results reported in accordance with accounting principles generally accepted in the United States of America ("GAAP"), we have provided the following non-GAAP financial measure in this release and the accompanying tables: adjusted EBITDA. We use this non-GAAP financial measures internally to facilitate period-to-period comparisons and analysis of our operating performance and liquidity, and believe it is useful to investors as a supplement to GAAP measures in analyzing, trending, and benchmarking the performance and value of our business. However, this measure is not intended to be a substitute for those reported in accordance with GAAP. These measures may be different from non-GAAP financial measures used by other companies, even when similar terms are used to identify such measures. For reconciliations of historical non-GAAP financial measures to the most comparable financial measures under GAAP, see the table below.

SYRA HEALTH CORP.
RECONCILIATION OF ADJUSTED EBITDA TO NET LOSS
(Unaudited)
	Six Months Ended				Six Months Ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Net Loss	$ (2,837,306)		$ (1,588,692)		$ (1,390,256)		$    (802,800)
Interest expense	7,806		30,269		3,729		18,850
Depreciation expense	29,919		24,056		17,374		12,293
Taxes	-		-		-		-
EBITDA	$ (2,799,581)		$ (1,534,367)		$ (1,369,153)		$    (771,657)

ABOUT SYRA HEALTH 

Syra Health is a healthcare technology company powering better health in challenging areas such as behavioral and mental health, digital health, and population health, by providing innovative services and technology products. Syra Health's offerings are centered on prevention, improved access, and affordable care. Syra Health supplies its solutions to payers, providers, life sciences organizations, academic institutions, and the government. For more information, please visit www.syrahealth.com.

Forward-Looking Statements 

Statements in this press release about future expectations, plans, and prospects, as well as any other statements regarding matters that are not historical facts, may constitute "forward-looking statements." These statements include but are not limited to, statements relating to the expected use of proceeds, the Company's operations and business strategy, and the Company's expected financial results. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. The forward-looking statements contained in this press release are based on management's current expectations and are subject to substantial risks, uncertainty, and changes in circumstances. Investors should read the risk factors set forth in our Form 10-K for the year ended December 31, 2023, and other periodic reports filed with the Securities and Exchange Commission. Any forward-looking statements contained in this press release speak only as of the date hereof, and, except as required by federal securities laws, the Company specifically disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

Contacts:

For Media Inquiries:
Syra Health
Communications & Marketing Director
Christine Drury
317-385-9227 
christined@syrahealth.com 

For Investor Inquiries:
Ben Shamsian
Lytham Partners, LLC
646-829-9701
shamsian@lythampartners.com 

SYRA HEALTH CORP.
CONDENSED BALANCE SHEETS
(UNAUDITED)
		June 30,				December 31,
		2024				2023
		(Unaudited)
ASSETS
Current assets:
Cash		$	1,594,352			$	3,280,075
Accounts receivable, net			790,095				1,060,634
Accounts receivable related party			51,411				50,614
Other current assets			391,019				389,787
Total current assets			2,826,877				4,781,110
Property and equipment, net			60,166				78,974
Right-of-use asset			351,193				63,199
Total assets		$	3,238,236			$	4,923,283
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable		$	500,114			$	462,991
Accrued expenses			174,217				198,978
Deferred revenue			6,108				-
Current portion of operating lease liability, related party			106,458				63,199
Notes payable			114,334				184,904
Total current liabilities			901,231				910,072
Non-current portion of operating lease liability, related party			244,735				-
Total liabilities			1,145,966				910,072
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares designated, issued and outstanding			-				-
Class A common stock, $0.001 par value, 100,000,000 shares authorized, 5,769,087 and 5,588,298 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively			5,769				5,588
Convertible class B common stock, $0.001 par value, 5,000,000 shares authorized, 833,334 shares issued and outstanding			833				833
Additional paid-in capital			9,987,929				9,071,745
Accumulated deficit			(7,902,261)				(5,064,955
Total stockholders' equity (deficit)			2,092,270				4,013,211
Total liabilities and stockholders' equity (deficit)		$	3,238,236			$	4,923,283

 

SYRA HEALTH CORP.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
		For the Three Months Ended								For the Six Months Ended
		2024				2023				2024				2023
Net revenues		$	1,969,681			$	979,248			$	3,722,021			$	2,167,599
Cost of services			1,619,674				851,089				3,192,727				1,892,284
Gross profit			350,007				128,159				529,294				275,315
Operating expenses:
Salaries and benefits			847,064				562,619				1,583,367				1,020,364
Professional services			141,456				128,844				336,036				365,504
Research and development expenses			277,894				-				555,442				-
Selling, general and administrative expenses			456,572				208,357				858,837				423,820
Depreciation			17,374				12,293				29,919				24,056
Total operating expenses			1,740,360				912,113				3,363,601				1,833,744
Operating loss			(1,390,353)				(783,954)				(2,834,307)				(1,558,429)
Other income (expense):
Interest income			3,826				4				4,807				6
Interest expense			(3,729)				(18,850)				(7,806)				(30,269)
Total other income (expense)			97				(18,846)				(2,999)				(30,263)
Net loss		$	(1,390,256)			$	(802,800)			$	(2,837,306)			$	(1,588,692)
Weighted average common shares outstanding - basic and diluted			6,602,421				4,378,751				6,548,817				4,390,363
Net loss per common share - basic and diluted		$	(0.21)			$	(0.18)			$	(0.43)			$	(0.36)

 

SYRA HEALTH CORP.
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023
(UNAUDITED)
		For the Six Months Ended
		June 30,
		2024				2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(2,837,306)			$	(1,588,692)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation			29,919				24,056
Bad debt expense			-				9,922
Common stock issued for services			37,750				-
Non-cash lease expense			63,199				59,676
Stock-based compensation, stock options			28,486				2,590
Changes in operating assets and liabilities:
Accounts receivable			270,539				778,146
Accounts receivable, related party			(797)				-
Other current assets			148,927				24,513
Accounts payable			37,123				226,298
Accounts payable, related parties			-				(3,200)
Deferred revenue			6,108				-
Accrued expenses			(24,761)				(106,396)
Operating lease liability			(63,199)				(59,676)
Net cash used in operating activities			(2,304,012)				(632,763)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment			(11,111)				(15,251)
Net cash used in investing activities			(11,111)				(15,251)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds received on exercise of warrants			850,129				-
Payment of deferred offering costs			-				(323,484)
Proceeds received from line of credit			-				300,000
Repayments on line of credit			-				(750,397)
Repayments on notes payable			(220,729)				-
Proceeds received from convertible notes payable			-				1,455,000
Net cash provided by financing activities			629,400				681,119
NET CHANGE IN CASH AND CASH EQUIVALENTS			(1,685,723)				33,105
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD			3,280,075				3,344
CASH AND CASH EQUIVALENTS AT END OF PERIOD		$	1,594,352			$	36,449
SUPPLEMENTAL INFORMATION:
Interest paid		$	7,806			$	18,000
Income taxes paid		$	-			$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Initial recognition of right-of-use asset and lease liability		$	351,193			$	-
Prepaid asset financed with note payable		$	150,159			$	-

 

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SOURCE Syra Health

FAQ

What was Syra Health's (SYRA) revenue growth in Q2 2024?

Syra Health (SYRA) reported a 101% revenue growth in Q2 2024, with revenue increasing to $2.0 million compared to $1.0 million in Q2 2023.

How did Syra Health's (SYRA) gross margins change in Q2 2024?

Syra Health's (SYRA) gross margins in Q2 2024 increased by 468 basis points compared to Q2 2023, reaching 17.8% from 13.1% the previous year.

What was Syra Health's (SYRA) cash balance as of June 30, 2024?

Syra Health (SYRA) reported a cash balance of $1.6 million as of June 30, 2024, with no long-term debt.

How many states does Syra Health (SYRA) currently operate in?

As of Q2 2024, Syra Health (SYRA) has active contracts in 23 states across the nation, a significant expansion from a handful of states a year ago.