AMN Healthcare Services Inc.
11/07/2025 | Press release | Distributed by Public on 11/07/2025 05:02
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto and other financial information included elsewhere herein and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the Securities and Exchange Commission ("SEC") on February 21, 2025 ("2024 Annual Report"). Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" are "forward-looking statements." See "Special Note Regarding Forward-Looking Statements." We undertake no obligation to update the forward-looking statements in this Quarterly Report. References in this Quarterly Report to "AMN Healthcare," the "Company," "we," "us" and "our" refer to AMN Healthcare Services, Inc. and its wholly owned subsidiaries.
Overview of Our Business
We provide technology-enabled healthcare workforce solutions and staffing services to healthcare organizations across the nation. The Company provides access to a comprehensive network of healthcare professionals through its recruitment strategies and breadth of career opportunities. We help providers optimize their workforce to reduce complexity and increase efficiency. Our total talent solutions include vendor-neutral and managed services programs, clinical and interim healthcare leaders, temporary staffing, permanent placement, executive search, vendor management systems, recruitment process outsourcing, workforce optimization, language services, revenue cycle solutions, and other services. Our diverse client base includes acute-care hospitals, community health centers and clinics, physician practice groups, retail and urgent care centers, home health facilities, schools, inpatient and outpatient rehabilitation facilities, ambulatory care facilities, outpatient surgical facilities, and many other healthcare settings.
We conduct business through three reportable segments: (1) nurse and allied solutions, (2) physician and leadership solutions, and (3) technology and workforce solutions. For the three months ended September 30, 2025, we recorded revenue of $634.5 million, as compared to $687.5 million for the same period last year. For the nine months ended September 30, 2025, we recorded revenue of $1,982.2 million, as compared to $2,249.1 millionfor the same period last year.
Nurse and allied solutions segment revenue comprised 58%and 60% of total consolidated revenue for the nine months ended September 30, 2025 and 2024, respectively. Through our nurse and allied solutions segment, we provide hospitals, other healthcare facilities, and schools with a comprehensive set of staffing solutions, including direct, vendor-neutral, and managed services solutions in which we manage and staff all the temporary and permanent nursing and allied staffing needs, as well as the revenue cycle management needs, of a client. A majority of our placements in this segment are under our managed services solution.
Physician and leadership solutions segment revenue comprised 27%and 25% of total consolidated revenue for the nine months ended September 30, 2025 and 2024, respectively. Through our physician and leadership solutions segment, we place physicians of all specialties, as well as dentists and advanced practice providers, with clients on a temporary basis, generally as independent contractors. We also recruit physicians and healthcare leaders for permanent placement and place interim leaders and executives on variable-length assignments across all healthcare settings.
Technology and workforce solutions segment revenue comprised 15%and 15% of total consolidated revenue for the nine months ended September 30, 2025 and 2024, respectively. Through our technology and workforce solutions segment, we provide hospitals and other healthcare facilities with a range of workforce solutions, including: (1) language services, (2) software-as-a-service ("SaaS")-based VMS technologies through which our clients can self-manage the procurement of contingent clinical labor and their internal float pool, (3) workforce optimization services that include advisory, planning, and analytics, and (4) recruitment process outsourcing services in which we recruit, hire and/or onboard permanent clinical and nonclinical positions on behalf of our clients.
On July 1, 2025, we completed the sale of our Smart Square healthcare scheduling software, one of our workforce optimization service offerings. See additional information in Note (2), "Sale of Disposal Group" to the accompanying financial statements.
Operating Metrics
In addition to our consolidated and segment financial results, we monitor the following key metrics to help us evaluate our results of operations and financial condition and make strategic decisions. We believe this information is useful in understanding our operational performance and trends affecting our businesses.
•Average travelers on assignment represents the average number of nurse and allied healthcare professionals on assignment during the period, which is used by management as a measure of volume in our nurse and allied solutions segment;
•Bill rates represent the hourly straight-time rates that we bill to clients, which are an indicator of labor market trends and costs within our nurse and allied solutions segment;
•Billable hours represent the number of hours worked by our healthcare professionals that we are able to bill on client engagements, which are used by management as a measure of volume in our nurse and allied solutions segment;
•Days filled is calculated by dividing total locum tenens hours filled during the period by eight hours, which is used by management as a measure of volume in our locum tenens business within our physician and leadership solutions segment;
•Revenue per day filled is calculated by dividing revenue of our locum tenens business by days filled for the period, which is an indicator of labor market trends and costs in our locum tenens business within our physician and leadership solutions segment; and
•Minutes represent the time-based utilization of interpretation services that we are able to bill our clients, which are used by management as a measure of volume in our language services business within our technology and workforce solutions segment.
Recent Trends
After the COVID-19 pandemic subsided, healthcare organizations began focusing on hiring permanent staff, implementing cost management strategies, and exploring alternative staffing models to decrease reliance on contingent labor. During the second quarter, uncertainty about government policy impacts appeared to place the healthcare sector in a more conservative stance with travel nurse demand declining compared with the first quarter. In our travel nurse business, demand increased in the third quarter compared to the second quarter with strong winter orders but overall remained slightly below prior year. In allied staffing, our demand continued to surpass pre-pandemic levels although demand is lower than prior quarter and in line with prior year.
For our nurse and allied solutions segment, in the third quarter we saw a decrease in overall staffing volume due to lower demand in travel nurse staffing in the prior quarter and seasonality. Average international nurse staffing volume reached a low point early in the third quarter and grew through the end of the quarter, although volume remained lower than both prior quarter and prior year. Overall, bill rates in the third quarter were relatively flat to the prior quarter.
In our physician and leadership solutions segment, third quarter demand for locum tenens staffing was down year over year but grew in the mid-single digits compared to the previous quarter. Certified registered nurse anesthetists (CRNAs) remain our largest locum tenens specialty. Demand for permanent search services was positive compared to prior year and prior quarter. Demand for interim leadership increased by double digits compared to prior year but was down quarter over quarter.
In our technology and workforce solutions segment, third quarter minute volume in the language services business grew compared to both the previous year and quarter, but at a slower pace than prior years. Ongoing pricing pressure for language services is expected due to increased market competition. Volumes in our VMS business declined both sequentially and compared to prior year primarily due to lower staffing volume levels and the delayed impact from prior period client losses.
Critical Accounting Policies and Estimates
The preparation of our consolidated financial statements in conformity with United States generally accepted accounting principles ("U.S. GAAP") requires us to make estimates and judgments that affect our reported amounts of assets and liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to intangible assets purchased in a business combination, asset impairments, accruals for self-insurance, compensation and related benefits, accounts receivable, contingencies and litigation, contingent consideration ("earn-out") liabilities associated with acquisitions, and income taxes. We base these estimates on the information that is currently available to us, and on various other assumptions that we believe are reasonable under the circumstances. Actual results could vary from these estimates under different assumptions or conditions. If these estimates differ significantly from actual results, our consolidated financial statements and future results of operations may be materially impacted. There have been no material changes in our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in our 2024 Annual Report.
Results of Operations
The following table sets forth, for the periods indicated, selected unaudited condensed consolidated statements of operations data as a percentage of revenue. Our results of operations include three reportable segments: (1) nurse and allied solutions, (2) physician and leadership solutions, and (3) technology and workforce solutions. Our historical results are not necessarily indicative of our future results of operations.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Unaudited Condensed Consolidated Statements of Operations: | |||||||||||||||||||||||
| Revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
| Cost of revenue | 70.9 | 69.0 | 70.8 | 68.9 | |||||||||||||||||||
| Gross profit | 29.1 | 31.0 | 29.2 | 31.1 | |||||||||||||||||||
| Selling, general and administrative | 21.8 | 21.8 | 22.2 | 21.1 | |||||||||||||||||||
| Depreciation and amortization | 6.0 | 6.0 | 5.8 | 5.6 | |||||||||||||||||||
| Gain on sale of disposal group | (6.2) | - | (2.0) | - | |||||||||||||||||||
| Goodwill impairment loss | - | - | 5.5 | - | |||||||||||||||||||
| Long-lived assets impairment loss | - | - | 0.9 | - | |||||||||||||||||||
| Income (loss) from operations | 7.5 | 3.2 | (3.2) | 4.4 | |||||||||||||||||||
| Interest expense, net, and other | 1.5 | 2.1 | 1.7 | 2.0 | |||||||||||||||||||
| Income (loss) before income taxes | 6.0 | 1.1 | (4.9) | 2.4 | |||||||||||||||||||
| Income tax expense (benefit) | 1.4 | 0.1 | (0.5) | 0.6 | |||||||||||||||||||
| Net income (loss) | 4.6 | % | 1.0 | % | (4.4) | % | 1.8 | % | |||||||||||||||
Comparison of Results for the Three Months Ended September 30, 2025 to the Three Months Ended September 30, 2024
Revenue. Revenue decreased 8% to $634.5 million for the three months ended September 30, 2025 from $687.5 million for the same period in 2024, attributable to a decline in revenue across our segments with the greatest decline in our nurse and allied solutions segment. Revenue broken down among the reportable segments is as follows:
| (In Thousands) | |||||||||||
| Three Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Nurse and allied solutions | $ | 361,476 | $ | 399,368 | |||||||
| Physician and leadership solutions | 178,214 | 180,605 | |||||||||
| Technology and workforce solutions | 94,806 | 107,536 | |||||||||
| $ | 634,496 | $ | 687,509 | ||||||||
Nurse and allied solutions segment revenue decreased 9% to $361.5 million for the three months ended September 30, 2025 from $399.4 million for the same period in 2024. The $37.9 million decrease was primarily attributable to a $40.7 million decline driven by a 11% decrease in the average number of travelers on assignment. The overall decrease was partially offset by a $12.0 million increase in labor disruption revenue.
Physician and leadership solutions segment revenue decreased 1% to $178.2 million for the three months ended September 30, 2025 from $180.6 million for the same period in 2024. The $2.4 million decrease was attributable to lower revenue in our interim leadership business partially offset by higher revenue in our locum tenens business within the segment. Revenue in our locum tenens business increased $4.0 million (or 3%) due to a $10.6 million increase driven by a 8% increase in the revenue per day filled, partially offset by a $6.6 million decline driven by a 5% decrease in the number of days filled. Our interim leadership business experienced a decline of $5.6 million (or 20%) and our physician permanent placement and executive search businesses declined $0.7 million (or 7%) during the three months ended September 30, 2025, primarily due to lower demand.
Technology and workforce solutions segment revenue decreased 12% to $94.8 million for the three months ended September 30, 2025 from $107.5 million for the same period in 2024. The $12.7 million decrease was primarily attributable to declines within our VMS and other solutions businesses. Revenue for our VMS business declined $8.1 million (or 32%) for similar reasons as nurse and allied solutions segment revenue, and our other solutions business declined $5.0 million (or 100%) primarily due to the sale of our Smart Square healthcare scheduling software.
For the three months ended September 30, 2025 and 2024, revenue under our MSP arrangements comprised approximately 41% and 44% of consolidated revenue, 63% and 68% of nurse and allied solutions segment revenue, 18% and 15% of physician and leadership solutions segment revenue, and 2% and 3% of technology and workforce solutions segment revenue, respectively.
Cost of Revenue. Cost of revenue, which consists predominantly of compensation, benefits, housing, travel and allowance costs for healthcare professionals and medically qualified interpreters, decreased 5% to $450.1 million for the three months ended September 30, 2025 from $474.5 million for the same period in 2024. The $24.4 million decrease was attributable to a decrease in our nurse and allied solutions segment. Cost of revenue broken down among the reportable segments is as follows:
| (In Thousands) | |||||||||||
| Three Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Nurse and allied solutions | $ | 274,420 | $ | 299,617 | |||||||
| Physician and leadership solutions | 129,690 | 129,570 | |||||||||
| Technology and workforce solutions | 45,974 | 45,267 | |||||||||
| $ | 450,084 | $ | 474,454 | ||||||||
The decrease in our nurse and allied solutions segment was primarily attributable to a $25.2 million decrease in clinician pay package costs, including housing, travel and allowances, primarily due to the aforementioned decrease in the average number of travelers on assignment.
Gross Profit. Gross profit decreased 13% to $184.4 million for the three months ended September 30, 2025 from $213.1 million for the same period in 2024, representing gross margins of 29.1% and 31.0%, respectively. The decline in consolidated gross margin for the three months ended September 30, 2025, as compared to the same period in 2024, was primarily due to (1) lower margins in our nurse and allied solutions segment driven by increased provider pay packages, including housing, travel and allowances, partially offset by a revenue mix shift within the segment, (2) lower margins in our physician and leadership solutions segment driven by increases in physician compensation outpacing increases in revenue per day filled and (3) a lower margin in our technology and workforce solutions segment primarily due to pricing pressure for our language services business due to increased market competition and a shift in sales mix resulting from reduced revenue in our higher-margin VMS business and the sale of our Smart Square healthcare scheduling software. Gross margin by reportable segment for the three months ended September 30, 2025 and 2024 was 24.1% and 25.0% for nurse and allied solutions, 27.2% and 28.3% for physician and leadership solutions, and 51.5% and 57.9% for technology and workforce solutions, respectively. Gross profit broken down among the reportable segments is as follows:
| (In Thousands) | |||||||||||
| Three Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Nurse and allied solutions | $ | 87,056 | $ | 99,751 | |||||||
| Physician and leadership solutions | 48,524 | 51,035 | |||||||||
| Technology and workforce solutions | 48,832 | 62,269 | |||||||||
| $ | 184,412 | $ | 213,055 | ||||||||
Selling, General and Administrative Expenses. Selling, general and administrative ("SG&A") expenses consist predominantly of compensation and benefits costs for corporate employees, in addition to professional service fees, legal matter accruals and other overhead costs. SG&A expenses were $138.6 million, representing 21.8% of revenue, for the three months ended September 30, 2025, as compared to $149.7 million, representing 21.8% of revenue, for the same period in 2024. The decrease in SG&A expenses was primarily due to a $11.9 million decrease in employee compensation and benefits (inclusive of
share-based compensation) in response to the lower revenue. SG&A expenses broken down among the reportable segments, unallocated corporate overhead, and share-based compensation are as follows:
| (In Thousands) | |||||||||||
| Three Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Nurse and allied solutions | $ | 58,295 | $ | 64,641 | |||||||
| Physician and leadership solutions | 32,794 | 32,901 | |||||||||
| Technology and workforce solutions | 20,191 | 22,249 | |||||||||
| Unallocated corporate overhead | 20,601 | 24,335 | |||||||||
| Share-based compensation | 6,713 | 5,555 | |||||||||
| $ | 138,594 | $ | 149,681 | ||||||||
Depreciation and Amortization Expenses.Amortization expense decreased 8% to $20.4 million for the three months ended September 30, 2025 from $22.1 million for the same period in 2024, primarily attributable to certain intangible assets becoming fully amortized during the three months ended September 30, 2025. Depreciation expense (exclusive of depreciation included in cost of revenue) decreased 11% to $16.9 million for the three months ended September 30, 2025 from $19.0 million for the same period in 2024, primarily attributable to the mix of depreciable assets. Additionally, $2.2 million and $1.9 million of depreciation expense for our language services business is included in cost of revenue for the three months ended September 30, 2025 and 2024, respectively.
Gain on Sale of Disposal Group. A gain on sale of disposal group of $(39.2) million was recognized during the three months ended September 30, 2025. See additional information in Note (2), "Sale of Disposal Group" to the accompanying financial statements.
Interest Expense, Net, and Other. Interest expense, net, and other was $9.6 million during the three months ended September 30, 2025 as compared to $14.4 million for the same period in 2024. The decrease was primarily due to a lower average debt outstanding balance during the three months ended September 30, 2025.
Income Tax Expense.Income tax expense was $8.7 million for the three months ended September 30, 2025 as compared to $0.8 million for the same period in 2024, reflecting effective income tax rates of 23% and 10% for these periods, respectively. The increase in the effective income tax rate was primarily due to tax expense of $5.5 million recognized during the three months ended September 30, 2025 from the goodwill disposal in the sale of our Smart Square healthcare scheduling software. We currently estimate our annual effective tax rate to be approximately 9% for 2025. The 23% effective tax rate for the three months ended September 30, 2025 differs from our estimated annual effective tax rate of 9% primarily due to tax expense recognized during the three months ended September 30, 2025, in relation to the projected full year tax benefit.
Comparison of Results for the Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024
Revenue. Revenue decreased 12% to $1,982.2 million for the nine months ended September 30, 2025 from $2,249.1 million for the same period in 2024, attributable to a decline in revenue across our segments with the greatest decline in our nurse and allied solutions segment. Revenue broken down among the reportable segments is as follows:
| (In Thousands) | |||||||||||
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Nurse and allied solutions | $ | 1,156,608 | $ | 1,361,064 | |||||||
| Physician and leadership solutions | 526,810 | 555,467 | |||||||||
| Technology and workforce solutions | 298,786 | 332,541 | |||||||||
| $ | 1,982,204 | $ | 2,249,072 | ||||||||
Nurse and allied solutions segment revenue decreased 15% to $1,156.6 million for the nine months ended September 30, 2025 from $1,361.1 million for the same period in 2024. The $204.5 million decrease was primarily attributable to a $220.2 million decline driven by a 16% decrease in the average number of travelers on assignment, a $33.7 million decline driven by an approximately 2.6% decrease in the average bill rate, and a $11.6 million decline driven by an approximately 1% decrease in average billable hours. The overall decrease was partially offset by a $66.0 million increase in labor disruption revenue.
Physician and leadership solutions segment revenue decreased 5% to $526.8 million for the nine months ended September 30, 2025 from $555.5 million for the same period in 2024. The $28.7 million decrease was attributable to lower revenue across all businesses within the segment. Revenue in our locum tenens business declined slightly due to a $33.2 million decline driven by a 8% decrease in the number of days filled, partially offset by a $32.6 million increase driven by an 8% increase in the revenue per day filled. Our interim leadership business experienced a decline of $19.6 million (or 22%) and our physician permanent placement and executive search businesses declined $8.5 million (or 23%) during the nine months ended September 30, 2025, primarily due to lower demand.
Technology and workforce solutions segment revenue decreased 10% to $298.8 million for the nine months ended September 30, 2025 from $332.5 million for the same period in 2024. The $33.7 million decrease was primarily attributable to declines within our VMS, outsourced solutions and other solutions businesses, partially offset by growth within our language services business. Revenue for our VMS business declined $26.3 million (or 32%) for similar reasons as nurse and allied solutions segment revenue and our outsourced solutions business experienced a decline of $5.5 million (or 43%) primarily due to lower demand. Other solutions business declined $6.3 million (or 39%) primarily due to the sale of our Smart Square healthcare scheduling software, while our language services business grew $3.9 million (or 2%) primarily due to a 6% increase in minutes.
For the nine months ended September 30, 2025 and 2024, revenue under our MSP arrangements comprised approximately 45% and 46% of consolidated revenue, 67% and 70% of nurse and allied solutions segment revenue, 18% and 14% of physician and leadership solutions segment revenue, and 3% and 3% of technology and workforce solutions segment revenue, respectively.
Cost of Revenue. Cost of revenue decreased 9% to $1,403.3 million for the nine months ended September 30, 2025 from $1,548.7 million for the same period in 2024. The $145.4 million decrease was primarily attributable to a decrease in our nurse and allied solutions segment. Cost of revenue broken down among the reportable segments is as follows:
| (In Thousands) | |||||||||||
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Nurse and allied solutions | $ | 884,554 | $ | 1,025,384 | |||||||
| Physician and leadership solutions | 381,573 | 388,141 | |||||||||
| Technology and workforce solutions | 137,146 | 135,159 | |||||||||
| $ | 1,403,273 | $ | 1,548,684 | ||||||||
The decrease in our nurse and allied solutions segment was primarily attributable to a $136.9 million decrease in clinician pay package costs, including housing, travel and allowances, primarily due to the aforementioned decrease in the average number of travelers on assignment. The decrease in our physician and leadership solutions segment was driven by a $6.4 million decrease in pay package costs in our interim leadership business, primarily due to the aforementioned decline in demand.
Gross Profit. Gross profit decreased 17% to $578.9 million for the nine months ended September 30, 2025 from $700.4 million for the same period in 2024, representing gross margins of 29.2% and 31.1%, respectively. The decline in consolidated gross margin for the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to (1) lower margins in our nurse and allied solutions and physician and leadership solutions segments driven by compression in clinician pay packages, including housing and travel and (2) a lower margin in our technology and workforce solutions segment primarily due to pricing pressure for our language services business due to increased market competition and a shift in sales mix resulting from reduced revenue in our higher-margin VMS business and the sale of our Smart Square healthcare scheduling software. The overall decline was partially offset by a change in sales mix resulting from reduced revenue in our lower-margin nurse and allied solutions segment. Gross margin by reportable segment for the nine months ended September 30, 2025 and 2024 was 23.5% and 24.7% for nurse and allied solutions, 27.6% and 30.1% for physician and leadership solutions, and 54.1%
and 59.4% for technology and workforce solutions, respectively. Gross profit broken down among the reportable segments is as follows:
| (In Thousands) | |||||||||||
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Nurse and allied solutions | $ | 272,054 | $ | 335,680 | |||||||
| Physician and leadership solutions | 145,237 | 167,326 | |||||||||
| Technology and workforce solutions | 161,640 | 197,382 | |||||||||
| $ | 578,931 | $ | 700,388 | ||||||||
Selling, General and Administrative Expenses. SG&A expenses were $440.9 million, representing 22.2% of revenue, for the nine months ended September 30, 2025, as compared to $473.6 million, representing 21.1% of revenue, for the same period in 2024. The decrease in SG&A expenses was primarily due to $36.8 million of lower employee compensation and benefits (inclusive of share-based compensation) in response to the lower revenue. The year-over-year decrease was partially offset by a $9.0 million year-over-year increase due to a $5.4 million unfavorable actuarial-based increase in our professional liability reserves as compared to a $3.6 million favorable actuarial-based decrease in the same period in 2024. SG&A expenses broken down among the reportable segments, unallocated corporate overhead, and share-based compensation are as follows:
| (In Thousands) | |||||||||||
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Nurse and allied solutions | $ | 182,572 | $ | 201,021 | |||||||
| Physician and leadership solutions | 101,559 | 105,309 | |||||||||
| Technology and workforce solutions | 66,647 | 69,268 | |||||||||
| Unallocated corporate overhead | 65,210 | 78,318 | |||||||||
| Share-based compensation | 24,921 | 19,651 | |||||||||
| $ | 440,909 | $ | 473,567 | ||||||||
Depreciation and Amortization Expenses.Amortization expense decreased 17% to $59.5 million for the nine months ended September 30, 2025 from $71.7 million for the same period in 2024, primarily attributable to certain intangible assets becoming fully amortized during the nine months ended September 30, 2025. Depreciation expense (exclusive of depreciation included in cost of revenue) decreased 3% to $53.5 million for the nine months ended September 30, 2025 from $55.2 million for the same period in 2024, primarily attributable to the mix of depreciable assets. Additionally, $6.4 million and $5.4 million of depreciation expense for our language services business is included in cost of revenue for the nine months ended September 30, 2025 and 2024, respectively.
Gain on Sale of Disposal Group. A gain on sale of disposal group of $(39.2) million was recognized during the nine months ended September 30, 2025.
Goodwill Impairment Loss.A goodwill impairment loss of $109.5 million was recognized in the physician and leadership solutions segment during the nine months ended September 30, 2025.
Long-Lived Assets Impairment Loss.An impairment loss of $18.3 million was recognized for intangible assets during the nine months ended September 30, 2025.
Interest Expense, Net, and Other. Interest expense, net, and other was $33.3 million during the nine months ended September 30, 2025 as compared to $46.8 million for the same period in 2024. The decrease was primarily due to a lower average debt outstanding balance during the nine months ended September 30, 2025.
Income Tax Expense (Benefit).Income tax expense (benefit) was $(8.9) million for the nine months ended September 30, 2025 as compared to $12.5 million for the same period in 2024, reflecting effective income tax rates of 9% and 24% for the nine months ended September 30, 2025 and 2024, respectively. The decrease in the effective income tax rate was primarily attributable to a significant decline in income (loss) before income taxes year over year, mostly related to a goodwill impairment loss, which resulted in tax expense of $11.0 million. Additionally, the goodwill disposal related to the sale of our Smart Square healthcare scheduling software resulted in tax expense of $5.5 million. Recognition of the goodwill impairment
loss and the goodwill disposal together resulted in tax expense of $16.5 million, which due to the loss before income taxes, contributed to the year-over-year decline in the effective income tax rate.
Liquidity and Capital Resources
In summary, our cash flows were:
| (In Thousands) | |||||||||||
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Net cash provided by operating activities | $ | 193,885 | $ | 247,604 | |||||||
| Net cash provided by (used in) investing activities | 12,355 | (65,735) | |||||||||
| Net cash used in financing activities | (212,651) | (179,550) | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | $ | (6,411) | $ | 2,319 | |||||||
Historically, our primary liquidity requirements have been for acquisitions, working capital requirements, and debt service under our credit facilities and senior notes. We have funded these requirements through internally generated cash flow and funds borrowed under our credit facilities and senior notes.
As of September 30, 2025, (1) no amount was drawn with $729.8 million of available credit under our $750.0 million secured revolving credit facility (the "Senior Credit Facility"), (2) the aggregate principal amount of our 4.625% senior notes due 2027 (the "2027 Notes") outstanding was $500.0 million, and (3) the aggregate principal amount of our 4.000% senior notes due 2029 (the "2029 Notes") outstanding was $350.0 million. We describe in further detail our Amended Credit Agreement (as defined below), under which the Senior Credit Facility is governed, the 2027 Notes, and the 2029 Notes in Part II, Item 8, "Financial Statements and Supplementary Data-Notes to Consolidated Financial Statements-Note (8), Notes Payable and Credit Agreement" of our 2024 Annual Report.
As of September 30, 2025, the total of our contractual obligations under operating leases with initial terms in excess of one year was $44.8 million. We describe in further detail our operating lease arrangements in Part II, Item 8, "Financial Statements and Supplementary Data-Notes to Consolidated Financial Statements-Note (5), Leases" of our 2024 Annual Report. We also have various obligations and working capital requirements, such as certain tax and legal matters, contingent consideration and other liabilities, that are recorded on our consolidated balance sheets. See additional information in the accompanying Note (7), "Fair Value Measurement," Note (8), "Income Taxes," Note (9), "Commitments and Contingencies," and Note (10), "Balance Sheet Details."
In addition to our cash requirements, we have a share repurchase program authorized by our board of directors, which does not require the purchase of any minimum number of shares and may be suspended or discontinued at any time. See additional information in the accompanying Part II, Item 2, "Unregistered Sales of Equity Securities and Use of Proceeds."
We believe that cash generated from operations and available borrowings under the Senior Credit Facility will be sufficient to fund our operations and liquidity requirements, including expected capital expenditures, for the next 12 months and beyond. We intend to finance potential future acquisitions with cash provided from operations, borrowings under the Senior Credit Facility or other borrowings under our Amended Credit Agreement, bank loans, debt or equity offerings, or some combination of the foregoing. The following discussion provides further details of our liquidity and capital resources.
Operating Activities
Net cash provided by operating activities for the nine months ended September 30, 2025 was $193.9 million, compared to $247.6 million for the same period in 2024. In the 2025 and 2024 periods, changes in accounts receivable and subcontractor receivables provided cash from operations of $59.2 million and $212.1 million, respectively, representing a reduction between periods of $152.9 million. The reduction in receivables was more significant in the prior year due to larger declines in revenue and associate vendor usage, as well as the timing of collections. In addition, net income (loss) excluding non-cash items decreased year over year by $57.5 million primarily due to lower segment operating income across our business.
The overall decrease in net cash provided by operating activities was partially offset by an increase in accounts payable and accrued expenses between periods of $120.5 million primarily due payment of the legal settlement amount for the Clarke matter in the prior year and a smaller reduction in subcontractor payables in the current year as a result of a larger decline in associate vendor usage in the prior year and timing of payments. Additionally, other liabilities increased between periods by $20.2 million primarily related to receipts of client deposits for labor disruption services.
Our Days Sales Outstanding ("DSO") was 57 days as of September 30, 2025, 55 days as of December 31, 2024, and 60 days as of September 30, 2024.
Investing Activities
Net cash provided by investing activities for the nine months ended September 30, 2025 was $12.4 million, compared to net cash used in investing activities of $65.7 million for the same period in 2024. The change was primarily due to (1) proceeds from sale of disposal group of $65.3 million during the nine months ended September 30, 2025, (2) capital expenditures of $27.7 million for the nine months ended September 30, 2025, as compared to $64.7 million for the nine months ended September 30, 2024, (3) a net purchase of investments of $25.3 million during the nine months ended September 30, 2025, as compared to net proceeds of $5.7 million during the nine months ended September 30, 2024, and (4) $6.1 million of payments to fund the deferred compensation plan that were offset with $6.1 million of proceeds from settlements of company-owned life insurance policies during the nine months ended September 30, 2025, as compared to $8.4 million of payments during the nine months ended September 30, 2024.
Financing Activities
Net cash used in financing activities during the nine months ended September 30, 2025 was $212.7 million, due to repayments of $285.0 million under the Senior Credit Facility and $1.7 million in cash paid for shares withheld for payroll taxes resulting from the vesting of employee equity awards, partially offset by borrowings of $75.0 million under the Senior Credit Facility. Net cash used in financing activities during the nine months ended September 30, 2024 was $179.6 million, due to repayments of $260.0 million under the Senior Credit Facility and $4.6 million in cash paid for shares withheld for payroll taxes resulting from the vesting of employee equity awards, partially offset by borrowings of $85.0 million under the Senior Credit Facility.
Amended Credit Agreement
On November 5, 2024, we entered into the fourth amendment to our credit agreement (the "Fourth Amendment"). The Fourth Amendment (together with the credit agreement as amended to such date, collectively, the "Amended Credit Agreement") increased our consolidated net leverage ratio covenant for the year ending December 31, 2025.
On October 6, 2025, we entered into the fifth amendment to our credit agreement (the "Fifth Amendment") as reported in our Current Report on Form 8-K filed on October 6, 2025. The Fifth Amendment provides for, among other things, the following: (i) an extension of the maturity date of Senior Credit Facility to October 6, 2030, (ii) a decrease of the revolving commitments to $450.0 million, and (iii) the revision of the Consolidated Net Leverage Ratio (as calculated in accordance with the amended credit agreement) to be no greater than 5.25 to 1.00 through March 31, 2027.
Our obligations under the Amended Credit Agreement are secured by substantially all of our assets. We describe in further detail the terms of the Amended Credit Agreement in Part II, Item 8, "Financial Statements and Supplementary Data-Notes to Consolidated Financial Statements-Note (8), Notes Payable and Credit Agreement" of our 2024 Annual Report.
6.500% Senior Notes Due 2031
On October 6, 2025, the Company completed the issuance of $400.0 million aggregate principal amount of 6.500% senior notes due 2031 (the "2031 Notes"). The 2031 Notes will mature on January 15, 2031. Interest on the 2031 Notes will be payable semi-annually in arrears on January 15 and July 15 of each year, commencing July 15, 2026.
At any time and from time to time on and after October 15, 2027, we will be entitled at our option to redeem all or a portion of the 2031 Notes upon not less than 10 nor more than 60 days' notice, at the redemption prices (expressed in percentages of principal amount on the redemption date) set forth below, plus accrued and unpaid interest, if any, to (but excluding) the redemption date (subject to the right of holders of record of the 2031 Notes on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve month period commencing on October 15 of the years set forth below:
| Period |
Redemption Price |
|||||||
| 2027 | 103.250 | % | ||||||
| 2028 | 101.625 | % | ||||||
|
2029 and thereafter
|
100.000 | % | ||||||
At any time and from time to time prior to October 15, 2027, we may also redeem 2031 Notes with the net cash proceeds of certain equity offerings in an aggregate principal amount not to exceed 40% of the aggregate principal amount of the 2031
Notes issued, at a redemption price (expressed as a percentage of principal amount) of 106.500% of the principal amount thereof plus accrued and unpaid interest, if any, to (but excluding) the applicable redemption date.
In addition, we may redeem some or all of the 2031 Notes at any time and from time to time prior to October 15, 2027 at a redemption price equal to 100% of the principal amount of the 2031 Notes redeemed, plus accrued and unpaid interest thereon, if any, to (but excluding) the applicable redemption date, plus a "make-whole" premium based on the applicable treasury rate plus 50 basis points.
Upon the occurrence of specified change of control events as defined in the indenture governing the 2031 Notes, we must offer to repurchase the 2031 Notes at 101% of the principal amount, plus accrued and unpaid interest, if any, to (but excluding) the purchase date.
The indenture governing the 2031 Notes contains covenants that, among other things, restricts our ability to:
•sell assets;
•pay dividends or make other distributions on capital stock, make payments in respect of subordinated indebtedness or make other restricted payments;
•make certain investments;
•incur or guarantee additional indebtedness or issue preferred stock;
•create certain liens;
•enter into agreements that restrict dividends or other payments from our restricted subsidiaries to us;
•consolidate, merge or transfer all or substantially all of their assets;
•enter into transactions with affiliates; and
•create unrestricted subsidiaries.
These covenants are subject to a number of important exceptions and qualifications. The indenture governing the 2031 Notes contains affirmative covenants and events of default that are customary for indentures governing high yield securities. The 2031 Notes and the guarantees are not subject to any registration rights agreement.
With the proceeds from the 2031 Notes, together with borrowings under the Senior Credit Facility and cash generated from operations, the Company (1) redeemed the entire outstanding $500.0 million aggregate principal amount of the 2027 Notes on October 22, 2025, including all accrued and unpaid interest on the 2027 Notes and (2) paid fees and expenses related to the transactions.
Letters of Credit
At September 30, 2025, we maintained outstanding standby letters of credit totaling $20.8 million as collateral in relation to our workers' compensation insurance agreements and a corporate office lease agreement. Of the $20.8 million of outstanding letters of credit, we have collateralized approximately $0.7 million in cash and cash equivalents and the remaining approximately $20.2 million is collateralized by the Senior Credit Facility. Outstanding standby letters of credit at December 31, 2024 totaled $20.9 million.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures," which is intended to enhance the transparency and decision-usefulness of income tax disclosures. The new guidance addresses investor requests for enhanced income tax information primarily through requiring disclosure of additional information about and further disaggregation of the rate reconciliation and income taxes paid. This standard is effective on a prospective basis for fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of adopting this standard on our disclosures.
In November 2024, the FASB issued ASU 2024-03, "Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses," which is intended to improve disclosures about the expenses of public entities. The new guidance requires more detailed information about the types of expenses in commonly presented expense captions (such as cost of sales and selling, general, and administrative expenses) and requires public entities to disclose, on an annual and interim basis, the amounts of expenses included in each relevant expense caption presented on the face of the income statement within continuing operations, in a tabular format. Additionally, public entities will be required to disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, the total amount of selling expenses and, in annual reporting periods, the definition of selling expenses. This standard is effective on either a prospective or retrospective basis for fiscal years beginning after
December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of adopting this standard on our disclosures.
There have been no other new accounting pronouncements issued but not yet adopted that are expected to materially affect our consolidated financial condition or results of operations.
Special Note Regarding Forward-Looking Statements
This Quarterly Report contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We base these forward-looking statements on our expectations, estimates, forecasts, and projections about future events and about the industry in which we operate. Forward-looking statements are identified by words such as "believe," "anticipate," "expect," "intend," "plan," "will," "should," "would," "project," "may," variations of such words, and other similar expressions. In addition, any statements that refer to projections of demand or supply trends, financial items, anticipated growth, future growth and revenues, future economic conditions and performance, plans, objectives and strategies for future operations, expectations, or other characterizations of future events or circumstances are forward-looking statements. All forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those discussed in, or implied by, these forward-looking statements. Factors that could cause actual results to differ materially from those implied by the forward-looking statements in this Quarterly Report are set forth in our 2024 Annual Report and include but are not limited to:
•the ability of our clients to increase the efficiency and effectiveness of their staffing management and recruiting efforts, through predictive analytics, automation, machine learning, artificial intelligence ("AI") or other advanced technologies or otherwise, and successfully hire and retain permanent staff, which may negatively affect our revenue, results of operations, and cash flows;
•the effects of the COVID-19 pandemic or any future pandemic or health crisis on our business, financial condition and results of operations;
•the effects of economic downturns, inflation, recession or slow recoveries, or additional changes in or continued uncertainty with respect to governmental policies, which could result in less demand for our services, increased client initiatives designed to contain costs, including reevaluating their approach as it pertains to contingent labor and managed services programs;
•any inability on our part to anticipate and quickly respond to changing marketplace conditions, such as alternative modes of healthcare delivery, reimbursement, or client needs and requirements;
•the level of consolidation and concentration of buyers of healthcare workforce, staffing and technology solutions, which could affect the pricing of our services and our ability to mitigate concentration risk;
•the negative effects that intermediary organizations may have on our ability to secure new and profitable contracts;
•a decline in the size of the insured population as a result of a repeal or significant erosion of the Patient Protection and Affordable Care Act;
•the effect of investigations, claims, and legal proceedings alleging medical malpractice, anti-competitive conduct, violations of employment, privacy and wage regulations and other legal theories of liability asserted against us, which could subject us to substantial liabilities;
•any inability on our part to grow and operate our business profitably in compliance with federal and state regulation, including privacy laws, conduct of operations, costs and payment for services and payment for referrals as well as laws regarding employment and compensation practices and government contracting;
•changes in United States immigration laws and policies, including those relating to workers from outside the United States and visa retrogression;
•any challenge to the classification of certain of our healthcare professionals as independent contractors, which could adversely affect our profitability;
•any inability on our part to recruit and retain sufficient quality healthcare professionals at reasonable costs, which could increase our operating costs and negatively affect our business and profitability;
•any technology disruptions or our inability to implement new infrastructure and technology systems effectively may adversely affect our operating results and ability to manage our business effectively;
•any failure to further develop and evolve our current workforce solutions technology offerings and capabilities, an increase in competition, or the ability of our competitors to respond more quickly to new or emerging client needs and marketplace conditions, which may harm our business and/or impact our ability to compete;
•disruption to or failures of our SaaS-based or technology-enabled services, or our inability to adequately protect our intellectual property rights with respect to such technologies or sufficiently protect the privacy of personal information, could reduce client satisfaction, harm our reputation and negatively affect our business;
•security breaches and cybersecurity incidents, including ransomware, that could compromise our information and systems, which could adversely affect our business operations and reputation and could subject us to substantial liabilities;
•widespread use of AI;
•any inability on our part to quickly and properly credential and match quality healthcare professionals with suitable placements, which may adversely affect demand for our services;
•any inability on our part to continue to attract, develop and retain our sales and operations team members, which may deteriorate our operations;
•our increasing dependence on third parties, including offshore vendors, for the execution of certain critical functions;
•the loss of our key officers and management personnel, which could adversely affect our business and operating results;
•any inability on our part to maintain our positive brand awareness and identity, which may adversely affect our results of operations;
•any inability to consummate and effectively incorporate acquisitions into our business operations, which may adversely affect our long-term growth and our results of operations;
•businesses we acquire may have liabilities or adverse operating issues, which could harm our operating results;
•any increase to our business and operating risks as we develop new services and clients, enter new lines of business, and focus more of our business on providing a full range of client solutions;
•the expansion of social media platforms presents new risks and challenges, which could cause damage to our brand reputation;
•any recognition of an impairment to the substantial amount of goodwill or intangible assets on our balance sheet, which could result in a material adverse impact to our results of operations;
•our indebtedness, which could adversely affect our ability to raise additional capital to fund operations, limit our ability to react to changes in the economy or our industry, and expose us to interest rate risk to the extent of any variable rate debt;
•the terms of our debt instruments that impose restrictions on us that may affect our ability to successfully operate our business;
•variable rate indebtedness; and
•the effect of significant adverse adjustments to our insurance-related accruals on our balance sheet, which could decrease our earnings or increase our losses and negatively impact our cash flows.
AMN Healthcare Services Inc. published this content on November 07, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 07, 2025 at 11:02 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]