AMN Healthcare Services Inc

Good day and thank you for standing by. Welcome to the AMN Healthcare Third Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Randall Reese, Senior Director, Investor Relations and Strategy. Please go ahead.

Good afternoon, everyone. Welcome to AMN Healthcare's third quarter 2024 earnings call. A replay of this webcast will be available at ir.amnhealthcare.com at the conclusion of this call. Remarks we make during this call about future expectations projections, trends, plans, events, or circumstances constitute forward-looking statements. These statements reflect the company's current beliefs based upon information currently available to it. Our actual results may differ materially from those indicated by these forward-looking statements because of various factors in cautionary statements, including those identified in our most recently filed Forms 10-K and 10-Q, our earnings released, and subsequent filings with the SEC. The company does not intend to update guidance or any forward-looking statements provided today prior to its next earnings release. This call contains certain non-GAAP financial information. Information regarding and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release and on our financial reports page. at ir.amnhealthcare.com. On the call with me today are Carrie Grace, President and Chief Executive Officer, and Jeff Knutson, Chief Financial Officer. I will now turn the call over to Carrie.

Thank you, Randy, and welcome to today's call. AMN Healthcare continues to build an attractive long-term story while we simultaneously deal with a challenging post-boom market for our industry. Financial results for the third quarter of 2024 were above expectations. Revenue of $688 million was above the upper end of our guidance range, and adjusted EBITDA of $74 million was above the consensus of sell-side analyst estimates. Excluding some beneficial discrete items, our revenue was in line with guidance. We continue to see signs of a stabilizing market with increasing demand for travel nurse staffing and healthy demand in most other staffing markets. We have also seen relatively stable bill rates for clinicians placed across our nurse, allied, and locums businesses, and new order bill rates among our top clients are evenly divided between raising and lowering rates. That some clients are raising rates is a significant change from the past six quarters. Nurse and allied travelers on assignment have been stable since July. Demand for travel nurse staffing in recent weeks was 60% above the low point in April, though still about 35% below the 2019 order level. Any areas of improvement in market dynamics have had little effect on near-term performance, but we expect them to be increasingly visible as we go through 2025. While competition to fill these orders has compressed industry gross margins this year, an increasing number of orders are priced below levels anyone will fill. Unfilled orders for nurse and allied and vendor neutral programs increased from about 9% last quarter to 14% currently. Suppliers are increasingly not filling orders priced at levels that don't make economic sense. And clinicians expect pay in line with broader wage and housing inflation. Our estimates indicate that travel nurse bill rates in the fourth quarter of 2024 have reached the low end of the 15 to 20% premium they maintained over the cost of permanent nurses prior to 2020, which could help explain the increase in unfilled orders in the industry. As conditions for healthcare labor continue to normalize, We expect margin pressure to subside as it did in past cycles. In some cases, the cost of alternatives to contingent staffing are already more expensive. Reaching this point is likely an important milestone for our industry's return to an improved operating environment. Across our businesses, AMN is responding aggressively to the current state of our industry. We are committed to being the most capable partner for helping clients develop and reach their workforce goals. Our progress on internal fill rates across Nurse and Allied has been positive, though affected by the same market dynamics that have resulted in an increase in unfilled orders. While we are ensuring that our pricing is competitive, we are doing so while delivering outstanding value and quality to our clients and healthcare professionals. We continue to build powerful solutions around our outstanding technology. Since I joined AMN eight quarters ago, the team has moved us from a lagging technology position to an empowered position where our clients and prospects have access to leading tools and technology to help them manage their healthcare workforce. In the past few months, we moved to net positive on the MSP Win-Loss Scoreboard for 2024 elevated by our improved competitive stance. Our recent client summit in Dallas resulted in a great reception for our new integrated technology suite we call WorkWise. WorkWise integrates workforce planning and reporting, predictive scheduling, vendor management solutions, and candidate engagement. Our client demos last month resulted in consistently positive feedback, and we are energized about our market positioning. Throughout this year, we have seen increasing demand for total talent solutions, and our average number of solutions used by our top clients has risen to approximately 10. Because of our broad solution set, we are uniquely positioned to help clients build a sustainable workforce strategy. Now, let's turn back and review our third quarter results by business segment. Nurse and Allied Solutions reported $399 million in revenue in the third quarter, 4% better than consensus due primarily to several beneficial factors that increased revenue by approximately 2%. Core performance was as expected with about 1% upside in volume offset by bill rate in hours slightly below forecast. Segment operating margin of 8.8% was positively impacted by approximately 180 basis points from the favorable items. Physician and Leadership Solutions revenue for the quarter was $181 million in line with consensus. Locum Tenens revenue of $142 million was up 26% year-over-year, including the MSCR acquisition, and down 3% organically. Volume for our organic locums business was modestly better than we had projected. Interim leadership and search continued to have lower demand. Segment operating margin of 10% was lower than we had expected due to gross margin pressure primarily from mix. Technology and workforce solutions recorded third quarter revenue of $108 million in line with consensus. Language Services, which had revenue of $75 million, up 13% year over year, saw several client disruptions caused by the CrowdStrike event and hurricanes in the third quarter that our teams helped them manage through. We continue to see strong client interest in our Language Services solution. VMS revenue was $25 million in the third quarter, in line with our expectations. Now, I'll turn the call over to Jeff for more details about our results.