Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• AMN Healthcare Services Inc (NYSE:AMN) reported fourth-quarter revenue of $735 million, exceeding the high end of their guidance by $30 million.
• The company successfully repaid $75 million in revolver debt during the quarter, supported by strong cash flow.
• AMN's technology and workforce solutions revenue outperformed guidance by 4%, driven by improved volume in language services.
• The company launched and scaled best-in-class technology solutions in 2024, enhancing visibility, cost control, and efficiency in staffing management.
• AMN's market-leading app, Passport, now supports locum tenens and enables clinicians to store preferences and automatically apply for matching opportunities.

Negative Points

• Staffing gross margins declined throughout 2024, with recent stabilization not yet leading to significant improvement.
• Travel nurse orders remain 20% below pre-pandemic levels, despite being above April 2024 levels.
• The company reported a non-cash impairment charge of $222 million, impacting the nurse and allied and physician and leadership solution segments.
• Fourth-quarter net loss was $188 million, largely due to the non-cash goodwill impairment charge.
• AMN's international nurse revenue faced a headwind due to visa retrogression, impacting the nurse and allied segment.

Q & A Highlights

• Warning! GuruFocus has detected 6 Warning Signs with RNG.

Q: How are you thinking about the segment gross margins for nurse and allied solutions in the first quarter, and how might labor disruption revenue influence that margin? A: (Brian Scott, CFO) The gross margin for nurse and allied solutions in the fourth quarter was 23.8%. For the first quarter, we expect margins to be relatively similar, around 22.5% to 23.8%. This stability is due to effective management of pay packages and negotiating bill rates, which have been stabilizing and are expected to rise modestly in the first quarter.

Q: What do you need to see in the market to start growing nurse and allied volume sequentially this year? A: (Cary Gray, CEO) We are seeing signs of normalization in the market, with healthcare systems returning to a more typical mix of permanent, contingent, and flexible staff. We expect patient demand to increase by 3-4% and wage inflation to remain above average. These factors should lead to increased orders and volume growth as the year progresses.

Q: Are you seeing a normal pattern in revenue trends similar to pre-pandemic levels, and what are your expectations for the rest of 2025? A: (Cary Gray, CEO) We are observing a return to normalcy, with order increases in nursing since last April and less drop-off in orders than pre-COVID levels. While there is still some residual client behavior change, we expect more normal trends in 2025, with good momentum in locums and language services.

Q: What is the impact of international revenue headwinds on your business, and how are large clients affecting your revenue? A: (Cary Gray, CEO) We expect a $100 million revenue headwind from international business between 2024 and 2025, with most of it in the first half of 2025. Some large clients are reducing their temporary staffing as they adjust their permanent and flexible staff mix, but this is not due to changing vendor models.

Q: How is the competitive landscape affecting your business, and are you seeing any consolidation in the industry? A: (Cary Gray, CEO) The competitive environment remains strong, with rational pricing decisions by competitors. We are well-positioned to be a partner for clients seeking sustainable workforce solutions. While there is some consolidation, it is too early to see a significant impact on competition.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.