By M. Marin
NASDAQ:SYRA
READ THE FULL SYRA RESEARCH REPORT
Management reiterates guidance for 64%-100% revenue advance in 2024 …
Syra Health Corp. (NASDAQ:SYRA), a healthcare technology company developing end-to-end solutions in multiple healthcare areas, reported 1Q24 results last week. Revenue for 1Q24 came in at $1.75 million compared to $1.19 million in 1Q23, representing a roughly 47% year-over-year improvement.
1Q24 Takeaways
▪ 1Q24 revenue improved 47% y/y to $1.75M
▪ Reiterated 2024 revenue guidance of $9M- $11M, up an expected 64% to 100% y/y
▪ Geographic & segment diversification continue; ex healthcare workforce ~19% revenues vs. 7%
▪ Investments in technology, personnel drive gains; near-term costs could outpace revenue gains
▪ Caduceus sub-contract could provide upside to guidance; SYRA optimistic about federal business
▪ Expanded footprint into 19th state with new Maine award
▪ Pipeline robust; believe Maricopa County relationship reflects positively on SYRA services
▪ SYRA’s research study protocol for Syrenity was approved by Pearl Institutional Review Board
Continuing to diversify revenue by business units…
Moreover, the company continues to diversify revenue streams both by geographic markets and its business units. The quarter specifically illustrates that revenue is becoming more diversified. For example, SYRA’s business units excluding Healthcare Workforce represented 19% of total revenues in 1Q24, up from only 7% in 1Q23. Aggregate revenues from SYRA’s other business units, excluding Healthcare Workforce, advanced 333% year-over-year. Revenue from the Healthcare Workforce unit was up 27.6% year-over-year off a significantly larger base. The company’s Healthcare Workforce Solutions segment provides on-demand temporary medical personnel, including nurses and nurses’ aides, among other healthcare workers.
SYRA is optimistic about the prospects for this segment, albeit run rates likely will not be at the same level as those recorded during the pandemic when the need for higher staffing levels at medical venues was acute. Nevertheless, the country is experiencing a growing healthcare workforce shortage and is expected to face a shortage of up to 124,000 physicians by 2034, according to the Association of American Medical Colleges. According to the Bureau of Labor Statistics (BLS), reflecting an aging population and an increase in chronic illnesses, including mental and behavioral health, 229,000 more jobs will be needed in the medical field by 2025. Moreover, an American Medical Association (AMA) survey indicates that 40% of physicians nationwide said they plan to leave practice within five years, often citing burnout as one of the primary reasons.
… and by geographic markets, expanding its footprint to 19 states recently…
SYRA has active contracts in 19 states nationwide at this point and expanding its footprint remains a core objective. The company recently marked its entrance into its 19th state when it won an award to develop a health equity accelerator plan for the City of Portland, Maine. With Syra’s presence now extended to 19 states across the U.S., SYRA expects to continue to win new contracts in additional markets.
Year-to-date, through various new business wins, the company has added the states of Maine, as noted, and Missouri, Tennessee and Nebraska. SYRA has indicated that it is engaged in discussions with potential partners in both new and existing markets.
SYRA reiterated its 2024 guidance; revenue is expected in a range of $9 million to $11 million. This guidance represents anticipated year-over-year growth of 64% to 100% and does not incorporate the potential revenue from the Caduceus Healthcare contract, for which SYRA is a sub-contractor. The strong 1Q24 revenue performance would seem to support the company’s outlook. Management also noted that revenue increases are expected to be 2H weighted.
SYRA also recently announced a partnership for a federal contract that overall is valued at $75 billion and believes this represents an important milestone as the company continues to expend its operating footprint. Specifically, SYRA has been selected as a subcontractor for this contract, which was awarded to Georgia-based Caduceus Healthcare. This sub-contractor award is not reflected in 2024 revenue guidance and could therefore provide upside to guidance, depending on when it comes on stream.
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