AMN Healthcare Services Q2 Earnings Call Highlights

AMN Healthcare exceeded Q2 guidance: Revenue rose 2% year over year to $673 million, while adjusted EBITDA increased 26% to $73 million and adjusted EPS reached $0.77. Results were boosted by $27 million from labor-disruption revenue and favorable reserve adjustments.

Nurse and allied staffing strengthened significantly: Segment revenue grew 11%, with travel nurse volume up 6% and allied volume up 7%; travel nurse orders were up about 40% year over year by early August. AMN expects both businesses to grow more than 10% in Q3.

Performance remained mixed across other businesses: Search revenue grew 27%, but locums revenue fell 8% and technology and workforce solutions declined 15%.

AMN forecast Q3 revenue of $640 million to $655 million and adjusted EBITDA margins of 6.5% to 7%.

AMN Healthcare Services NYSE: AMN reported second-quarter results above its guidance range, aided by stronger demand in travel nursing, allied staffing and search services, as well as labor disruption-related revenue and several favorable reserve items.

Revenue totaled $673 million, up 2% from a year earlier and 6% above the high end of the company’s outlook. Adjusted EBITDA rose 26% year over year to $73 million, representing 10.9% of revenue, while adjusted earnings per share were $0.77, compared with $0.30 in the prior-year quarter. The company ended the quarter with $362 million in cash and equivalents.

Chief Executive Officer Cary Grace said five of AMN’s solutions posted year-over-year revenue growth. She said the company is seeing rising client demand for flexible staffing as the premium for contingent labor relative to permanent labor has fallen to the mid- to high-single-digit percentage range, compared with the mid- to high-teens before the COVID-19 pandemic.

Chief Financial Officer and Chief Operating Officer Brian Scott said the company’s second-quarter guidance had assumed $10 million in labor disruption revenue, but reported $25 million. Results also benefited from a billing-accrual true-up related to large first-quarter labor disruption events, a reserve reversal from a prior-year event and other favorable reserve adjustments.

Scott said those items added about $27 million to revenue, 290 basis points to consolidated gross margin and 370 basis points to adjusted EBITDA margin. Excluding those items, revenue would still have been nearly 2% above the high end of guidance, while EBITDA margin would have been at the top of the company’s 6.7% to 7.2% projected range. Reported gross margin was 30.6%, and second-quarter net income was $21 million, compared with a $116 million net loss a year earlier. Adjusted SG&A expense was $135 million, down 4% from the prior-year period. SG&A included a $5 million unfavorable professional-liability actuarial adjustment, partly offset by a $3 million favorable adjustment to the allowance for credit losses.

Revenue in the Nurse and Allied Solutions segment increased 11% year over year to $422 million, with a 28.4% gross margin. Travel nurse volume rose 6%, while allied volume increased 7%, which Grace described as the strongest growth rates for those businesses in four years. International nurse revenue increased 23%. Grace said travel nurse orders turned positive year over year in May and accelerated in June. As of early August, orders were up about 40% from a year earlier and 20% above August 2024 levels. Allied orders also accelerated through the quarter, reaching mid-teens growth in June and July, according to the company. AMN attributed its performance to improving demand and higher fill rates, supp...