By M. Marin
NASDAQ:SYRA
READ THE FULL SYRA RESEARCH REPORT
Federal business line is growing with 2nd sub-contractor role…
Syra Health Corp. (NASDAQ:SYRA), a healthcare technology company developing end-to-end solutions in multiple healthcare areas, this week announced its second federal subcontractor award. The company has been selected as a sub-contractor for prime contractor LUKE on a 10-year Defense Health Agency (DHA) contract. The contract is valued at $43 billion over the 10-year contract term and is to provide medical staffing services at DHA facilities nationwide.
LUKE apparently has been awarded all areas of responsibility for staffing several DHA labor categories including staffing physicians, nurses, dentists, ancillary services, and medical support personnel. Syra Health will serve as a sub-contractor, helping LUKE perform the contracted services, including providing contract workers across various healthcare labor categories to support the requirements within DHA hospitals, clinics, dental facilities, and health activities nationwide in the U.S., Washington DC, Puerto Rico, Guam, and U.S. territories and possessions.
The contract is expected to commence in June 2024 and run through May 31, 2034. The company expects that some task orders will be received before year-end 2024. Task orders will determine the portion of contract revenue that is earmarked for Syra Health. However, we believe that billings and revenue in the door might lag the receipt of task orders.
First federal based contract was as a sub-contractor for Caduceus Healthcare …
Earlier this year SYRA announced a partnership for a federal contract that overall is valued at $75 billion. Specifically, SYRA has been selected as a subcontractor for this contract, which was awarded to Georgia-based Caduceus Healthcare by the federal Department of Health and Human Services (HHS), Administration for Families and Children (ACR), Office of Refugee Resettlement (ORR) Medical Staffing and Support. Syra Health will provide multiple services to Caduceus Healthcare as a sub-contractor to support this award. Overall, the contract is for Caduceus Healthcare to provide temporary shelter, care facilities, direct care services, medical care, case management, education, and transportation in support of HHS’s Influx Care Facilities.
With SYRA’s recent selection as a subcontractor for the LUKE and Caduceus awards, the company is optimistic about its prospects for winning new federal contracts as the company continues to expand its operating footprint. Moreover, having introduced its federal government solutions unit only a few short months ago in December 2023, the company believes this also underscores the value of its growing portfolio of products, tools and services. This Caduceus sub-contractor award represents SYRA’s first federal-based contract and now with the LUKE award, the company has further expanded its federal based business.
As it expands various business lines, the company also continues to diversify revenue streams both by geographic markets and its business units. The LUKE sub-contractor award bodes well for these growth objectives, as well, we believe.
For instance, in 1Q24, 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.
LUKE contract to provide “services at DHA facilities across the country”…
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. Year-to-date, through various new business wins, the company has added the states of Maine and Missouri, Tennessee and Nebraska. SYRA has indicated that it is engaged in discussions with potential partners in both new and existing markets. With Syra’s presence now extended to 19 states across the U.S., SYRA expects to continue to win new contracts in additional markets, which the LUKE subcontract would seem to support, we believe, as potentially it represents services across the country, Washington DC, Puerto Rico, Guam, and U.S. territories and possessions.
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