Cross Country Healthcare, Inc.

Good afternoon, everyone, and welcome to the Cross Country Healthcare's Earnings Conference call for the fourth quarter of 2025. Please be advised that this call is being recorded and a replay of the webcast will be available on the company's website. Details for accessing the audio replay can be found in the company's earnings release issued this afternoon. At the conclusion of the pre-remarks, I will open the lines for questions. I will now like to turn the call over to Josh Vogel, Cross Country Healthcare's Vice President of Investor Relations. Thank you, sir. You may go ahead.

Thank you, and good afternoon, everyone. I'm joined today by our Chairman of the Board and Chief Executive Officer, Kevin Clark, as well as Bill Burns, our Chief Financial Officer, Mark Krug, Group President of Delivery, and Amy Hawkins, Chief Solutions and Operations Officer. Today's call will include a discussion of our financial results for the fourth quarter of 2025, as well as our outlook for the first quarter of 2026. A copy of our earnings press release is available on our website at crosscountry.com. Please note that certain statements made on this call may constitute forward-looking statements. These statements reflect the company's beliefs based upon information currently available to it. As noted in our press release, forward-looking statements can vary materially from actual results and are subject to known and unknown risks, uncertainties, and other factors, including those contained in the company's 2024 annual report on Form 10-K and quarterly reports on Form 10-Q, as well as in other filings with the SEC. The company does not intend to update guidance or any of its forward-looking statements prior to the next earnings release. Additionally, we reference non-GAAP financial measures such as adjusted EBITDA or adjusted earnings per share. Such non-GAAP financial measures are provided as additional information and should not be considered substitutes for or superior to those calculated in accordance with U.S. GAAP. More information related to these non-GAAP financial measures is contained in our press release. With that, I will now turn the call over to our Chief Executive Officer, Kevin Clark.

Good afternoon, and thank you for joining us. As you know, 2025 was a challenging year for cross-country healthcare. The pending merger introduced uncertainty for our employees and our customers, which weighed on our growth during the year. With that process now behind us, we have improved momentum and a renewed focus across the organization. However, what did not change was the strength of our client relationships, the quality of our clinicians, or the financial strength of our balance sheet. I step back into the CEO role with a clear objective, restore momentum, sharpen execution, and position the company to grow faster than the market again. As reflected in the recent Becker's article on cross-country, we are advancing a strategy built on operational rigor, technology-powered workforce solutions, and disciplined capital allocation to drive long-term shareholder value. We enter 2026 with no debt and a significant amount of cash, providing us the flexibility to invest in growth initiatives that generate durable returns. Our priorities are straightforward. Simply put, we must expand our market share within large health systems, capture new logos across our divisions, improve operational efficiency and speed to fill, and leverage technology as a differentiator. I am confident that this will be a year of execution and acceleration. The opportunity in front of us is meaningful, and with disciplined execution and renewed commercial focus, we expect to return to revenue and earnings growth by the end of 2026. Now, turning to our business performance, I'll start with discussing the markets we serve and the actions we are taking to achieve growth in 2026 and beyond. Looking at the healthcare staffing market and travel in particular, we believe that the industry has stabilized and is poised for growth in 2026. With stability in both demand and in bill rates, clients are increasingly focused on the speed to fill rather than reducing contingent labor, signaling a shift to a more normal operating environment. This is evident in our weekly production since the start of the year, which has outpaced the fourth quarter. For the first time in more than three years, we are anticipating travel to be flat to up slightly on a sequential basis with projected travelers on assignment growing each month into the second quarter. Contributing to the improved production is our growing book of business. As highlighted in our third quarter 2025 earnings release, we successfully renewed, expanded, and won more than $400 million in contract value, predominantly with our MSP clients. Given our robust pipeline of sales activity across multiple business lines, we are well positioned to expand our portfolio and secure new clients in 2026. Shifting to gross margin, we expect travel will continue to experience a tight bill pay spread as competitors jockey for market share. As a leader in this space, cross-country will remain competitive to protecting growth clinicians on assignments. Although we do not anticipate margin pressure easing for the travel business in the near term, we will seek to maintain and expand our consolidated gross margins through growth in our higher margin businesses, which had aggregate annual revenues over $350 million last year. We see a path for growth across all our lines of business through our growing proprietary technology portfolio anchored by Intellify. our market-leading workforce intelligence platform that supports virtually all of our MSP and vendor-neutral programs. Through this technology, we've delivered predictive visibility, optimized clinician deployment, and improved labor cost management for health systems. At its core, Intellify is a highly scalable VMS capable of managing all staffing categories, including physicians, per diem, and internal resource pools or travel programs. And we are seeing growing interest from other staffing organizations seeking to leverage the platform within their own offerings. In 2026, we plan to expand Intellify into the home-based and education staffing markets, extending its reach into adjacent sectors that demand scalable workforce solutions. Our software portfolio also includes experienced, an established mobile platform actively used by healthcare professionals to discover opportunities and manage their careers digitally, strengthening engagement and retention across our talent network. Our staffing business remains a strong foundation, but our long-term growth strategy is increasingly powered by our proprietary technology portfolio. enhancing client value, improving efficiency, expanding margins, and creating scalable recurring revenue streams. These solutions represent the continued evolution of our broader technology roadmap. Our objective is not to move away from staffing, but to transform how workforce solutions are delivered. Our other technology priorities involve automation across the enterprise through AI and other means, such as the rollout of the middle office functionality within our ERP. Unleashing the power of AI will improve speed to market and boost recruiter productivity, while the completion of the ERP project will improve our efficiency in back office operations. It's clear that technology is central to how we will grow and deliver better outcomes while improving efficiency and productivity. but it is not the only lever we are pulling to drive top-line growth. Since the start of the year, we have made conscious and purposeful investments in revenue producers across the organization. Primarily funded by redeploying cost savings, we were able to identify and act quickly upon. In the first quarter, we have added several dozen revenue producers, including recruiters, account managers, and sales professionals, and we are already seeing positive results from these investments. Looking ahead, I believe we will see sequential progression across 2026 with both top line growth and improved profitability. Bill will cover the first quarter guidance, but our goal is to exit 2026 with a revenue run rate north of $1 billion and an adjusted EBITDA margin of 4% to 5% and on a path to higher margins for 2027. With a strong balance sheet and more than 100 million in cash on hand, we are well positioned to accomplish our goals. We will be diligent and purposeful in deploying capital with an eye towards a mix of complementary acquisitions and returning capital to shareholders through continued share repurchases. One of the biggest strengths for cross-country is our high-performing, highly engaged team, both here in the U.S. and in our center of excellence in India. I've had the pleasure of seeing a lot of familiar faces as well as meeting new ones over the past three months. And I can tell you that I'm truly excited by their focus, energy, teamwork, and execution. I want to take this moment to thank all of our employees for your hard work and steadfast commitment to making cross-country the best in the industry. I also want to thank all of our healthcare professionals for your continued dedication and contributions. as well as our shareholders for believing in the company. In closing, I'm excited to be back, and I'm equally excited about what lies ahead for Cross Country. With that, let me turn the call over to Bill.