Syra Health (SYRA) - 2025 Q2 - Quarterly Results

Executive Summary Q2 2025 Financial Highlights Syra Health reported Q2 2025 revenue consistent with the prior year, driven by significant growth in Population Health. The company achieved substantial improvements in gross margin and earnings per share, moving closer to profitability. | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------- | :---------- | :---------- | :----------- | | Revenue | $1.9 Million | Consistent | - | | Population Health Growth | +197% | - | - | | Gross Margin | 38.7% | 17.8% | +2,090 bps | | EPS | ($0.01) | ($0.21) | Significant improvement | - Cash on hand was $2.3 million with no long-term debt as of June 30, 2025[4] 2025 Financial Outlook The company anticipates potential negative impacts on revenue, operations, and cash flows due to heavy reliance on government budgets and recent federal spending program pauses or terminations, leading to delays or cancellations in contract awards. - Heavy dependence on state, local, and county government budgets for revenue[3] - United States federal government began pausing or terminating numerous spending programs, potentially affecting customer funding[3] - Anticipated delays in new contract awards or cancellations of previous requests for proposals, potentially negatively affecting revenue, operations, and cash flows[3] Management Commentary Interim CEO Priya Prasad highlighted the company's progress towards profitability, driven by the strong performance of the Population Health business unit and disciplined execution. The company is also strategically expanding into the private sector to complement its public sector foundation. - Company is "inching closer to profitability" fueled by growth of the Population Health business unit[6] - Population Health delivers high-impact services including health education, training, data collection, analytics, and large-scale program implementations[6] - Expanding into the private sector, complementing the strong foundation with public sector customers[6] Operational Highlights Recent Operational Achievements Syra Health secured significant contracts, including a $5.8 million agreement for Indiana's Child Mental Health Wraparound program and a $2.1 million contract with a major health insurer, marking a strategic entry into the private sector. The company also achieved ISO 27001:2022 certification for data security. - Engaged in contract negotiations for a $5.8 million agreement to serve as Indiana's Statewide Access Site for the Child Mental Health Wraparound (CMHW) program[8] - Awarded a contract worth up to $2.1 million to provide medical management nurses for a major health insurer, marking a significant step into the private sector[8] - Achieved ISO 27001:2022 certification, demonstrating commitment to data protection and information security[8] Detailed Financial Review Revenue and Gross Margin Analysis Q2 2025 revenue remained consistent year-over-year, primarily driven by the high-margin Population Health business unit's substantial growth. Gross profit margin significantly expanded due to a strategic focus on higher-margin units and key project milestones. | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :---------------- | :---------- | :---------- | :----------- | | Net Revenues | $1,946,199 | $1,969,681 | -1.2% | | Cost of Services | $1,193,304 | $1,619,674 | -26.3% | | Gross Profit | $752,895 | $350,007 | +115.1% | | Gross Profit Margin | 38.7% | 17.8% | +2,090 bps | - Revenue in Q2 2025 was driven by the high-margin Population Health business unit, which expanded 197% year-over-year[7] - Gross margin increased due to strategic focus on higher-margin business units and completion of key project milestones[4][9] Operating Expenses Breakdown Total operating expenses for Q2 2025 significantly decreased by 53% year-over-year, primarily due to disciplined cost management, workforce optimization, and reduced R&D expenses. | Expense Category | Q2 2025 | Q2 2024 | Change (YoY) | | :----------------------------- | :---------- | :---------- | :----------- | | Total Operating Expenses | $816,053 | $1,740,360 | -53% | | Salaries and benefits | $326,354 | $847,064 | -61% | | Professional services | $164,939 | $141,456 | +17% | | Research and development expenses | $29,712 | $277,894 | -89% | | Selling, general and administrative | $289,069 | $456,572 | -37% | - Reduction in operating expenses was driven by continued disciplined cost management and workforce optimization[9][11] Profitability Metrics Syra Health demonstrated significant improvement in profitability, with Adjusted EBITDA moving closer to breakeven and net loss decreasing by 95% in Q2 2025, reflecting benefits from operational restructuring. | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :---------------- | :---------- | :---------- | :----------- | | Operating Loss | ($63,158) | ($1,390,353) | +95.5% | | Adjusted EBITDA | ($54,000) | ($1.4 million) | Significant improvement | | Net Loss | ($63,596) | ($1,390,256) | -95% | - Improvement in net loss reflects the benefits from operational restructuring efforts conducted last year[10] Cash and Debt Position As of June 30, 2025, Syra Health maintained a healthy cash position of $2.3 million with no long-term debt, indicating financial stability. - Cash on hand as of June 30, 2025, was $2.3 million[13] - No long-term debt as of June 30, 2025[13] Condensed Financial Statements Condensed Balance Sheets The balance sheet shows a slight decrease in total assets from $3.68 million at December 31, 2024, to $3.47 million at June 30, 2025. Current assets remained relatively stable, while total liabilities increased, primarily due to a rise in accounts payable and deferred revenue. | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Total Assets | $3,471,462 | $3,679,332 | | Total Liabilities | $1,057,299 | $800,761 | | Total Stockholders' Equity (Deficit) | $2,414,163 | $2,878,571 | | Cash and cash equivalents | $2,305,924 | $2,395,405 | | Accounts receivable, net | $886,361 | $680,827 | | Accounts payable | $557,056 | $101,690 | | Deferred revenue | $266,611 | $16,611 | Condensed Statements of Operations For the three months ended June 30, 2025, net revenues were consistent with the prior year, but gross profit more than doubled due to reduced cost of services. The company significantly reduced operating expenses, leading to a substantial decrease in net loss. | Metric | 2025 | 2024 | | :---------------------------------- | :---------- | :---------- | | Net revenues | $1,946,199 | $1,969,681 | | Cost of services | $1,193,304 | $1,619,674 | | Gross profit | $752,895 | $350,007 | | Total operating expenses | $816,053 | $1,740,360 | | Operating loss | ($63,158) | ($1,390,353) | | Net loss | ($63,596) | ($1,390,256) | | Net loss per common share - basic and diluted | ($0.01) | ($0.21) | Condensed Statements of Cash Flows For the six months ended June 30, 2025, net cash used in operating activities significantly decreased compared to the prior year, reflecting improved operational efficiency. Cash and cash equivalents at the end of the period were $2.3 million. | Metric | 2025 | 2024 | | :------------------------------------ | :---------- | :---------- | | Net cash provided by/(used in) operating activities | ($38,112) | ($2,304,012) | | Net cash used in investing activities | $0 | ($11,111) | | Net cash provided by/(used in) financing activities | ($51,369) | $629,400 | | Net change in cash and cash equivalents | ($89,481) | ($1,685,723) | | Cash and cash equivalents at end of period | $2,305,924 | $1,594,352 | Non-GAAP Financial Measures Reconciliation of Adjusted EBITDA to Net Loss The company provides Adjusted EBITDA as a non-GAAP measure to supplement GAAP results, facilitating period-to-period comparisons and analysis of operating performance. For Q2 2025, Adjusted EBITDA was ($53,760), a substantial improvement from ($1,369,153) in Q2 2024. - Adjusted EBITDA is a non-GAAP financial measure used internally and for investors to facilitate period-to-period comparisons and analysis of operating performance and liquidity[20] | Metric | 2025 | 2024 | | :------------------------------------------------ | :---------- | :---------- | | Net Loss | ($63,596) | ($1,390,256) | | Interest Expense | $3,858 | $3,729 | | Depreciation Expense | $5,978 | $17,374 | | Taxes | $0 | $0 | | Earnings before Interest, Taxes Depreciation and Amortization (Adjusted EBITDA) | ($53,760) | ($1,369,153) | Additional Information About Syra Health Syra Health is a healthcare technology company focused on improving health in areas like mental health, population health, and healthcare workforce through innovative technology products and services, emphasizing prevention, access, and affordability. - Syra Health is a healthcare technology company focused on powering better health in critical areas such as mental health, population health, and the healthcare workforce[23] - The company's technology products and innovative services focus on prevention, access, and affordability[23] Forward-Looking Statements The report contains forward-looking statements regarding future expectations, plans, and financial results, which are subject to substantial risks and uncertainties. Investors are advised to review risk factors in SEC filings, and the company disclaims any obligation to update these statements. - Statements about future expectations, plans, and prospects, as well as other non-historical facts, constitute "forward-looking statements"[24] - These statements are based on management's current expectations and are subject to substantial risks, uncertainty, and changes in circumstances[24] - Investors should read the risk factors set forth in the company's Form 10-K and other periodic reports filed with the SEC[24] Investor and Media Inquiries Contact information for investor and media inquiries is provided for Syra Health. - Contact Christine Drury (IR/PR) at 463-345-5180 or christined@syrahealth.com for investor or media inquiries[25]