AMN Healthcare Services Inc

Good day, and thank you for standing by. Welcome to the AMN Healthcare first quarter 2025 earnings 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 11 on your telephone. You'll then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 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, Vice President of Investor Relations.

Good afternoon, everyone. Welcome to AMN Healthcare's first quarter 2025 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 Kerry Grace, President and Chief Executive Officer, and Brian Scott, Chief Financial and Operating Officer. I will now turn the call over to Carrie.

Thank you, Randy, and welcome to our first quarter conference call. The AMN team showed off its energy and resourcefulness in the first quarter, and the results were revenue and profit margins that exceeded the high end of guidance. Revenue of 690 million topped the high end of guidance by 10 million due to strength in our labor disruption, locum tenens, and allied businesses. our other businesses on balance were in line with our revenue forecast. The company reported $64 million in adjusted EBITDA and another quarter of robust cash flow and debt reduction. Thank you to our healthcare professionals and the entire AMN team for delivering a solid start to the year. For the second quarter, our outlook for revenue and earnings compares well against consensus estimates with continued upside from labor disruption, locum tenens, and allied staffing revenue. We received $39 million in revenue from two labor disruption events in the first quarter with continued activity in the second quarter. Increasingly, labor disruption has become a differentiated solution that supports an important client need. We have built the leading event management technology and strengthened our ability to manage labor disruption activities without interrupting the strong service quality in our core business. These differentiating capabilities have been greeted by a series of client wins and a large pipeline of opportunities which could offer upside potential this year and next. Bookings for locum tenants picked up significantly in the first four months of the year. We expect locum tenens to have sequential revenue growth this quarter with good momentum going into the rest of the year. Demand for allied business has grown mid-teens year-over-year. We continue to see healthy allied demand into this quarter and strong execution from our team. In our schools business, bookings for the next school year are trending towards year-over-year growth driven by strength in orders and candidate submissions. For our travel nurse business, revenue volume and bill rate were in line with our projections for the first quarter. Our second quarter revenue outlook for travel nurse calls for relatively normal seasonality, and we continue to see both intense competition to fill orders and some orders priced at levels that no one is filling. We made strides year to date in stabilizing gross margins, which came down across our industry last year. Consolidated gross margin was 28.7% in the first quarter, slightly better than the high end of guidance. Nurse and Ally Solutions gross margin of 22.7% was 90 basis points better than consensus. Our gross margin performance benefited from some process changes that have enabled improved internal execution, and we just rolled out new technology that enhances recruiter productivity and faster speed to submission. We continue to invest in technology that improves our speed and fill rate, including AI tools that reduce costs and improve how we deliver our services. Our market-leading app for healthcare professionals, AMN Passport, has now been rolled out to locum tenants. The app has potential for valuable improvements to our physician engagement and support. Passport gives locums physicians the ability to submit their shift reports in the app, which we expect to greatly speed the submission process, reduce errors, and improve physician satisfaction. We will continue to make enhancements to Passport to expand its capabilities and extend into other AMN service lines. AMN also is gaining momentum in enterprise sales. The company signed five new MSP and vendor neutral wins last quarter, reflecting improvement in our win rate, and we are seeing strong client retention rates. While the selling environment remains highly competitive, we are seeing interest in solutions that combine technology and services to help clients build and sustain a high-quality and cost-effective workforce. We will complete the rollout of ShiftWise Flex to our client base next month. This powerful and versatile technology is a cornerstone of our new WorkWise staffing management, engagement, and optimization platform. WorkWise has drawn a positive reception from new and existing clients. WorkWise is another example of how our diverse set of solutions is positioned to serve clients and healthcare professionals across the spectrum of care. This diversification also has allowed AMN to maintain operating leverage that is superior to our competitors and generate cash flow to invest in the business while also reducing debt. We are pleased to receive industry recognition for innovation that measurably improves the quality and efficiency of care. Modern Healthcare recognized work-wise an AMN passport in its 2025 Innovators Award. AMN is the only talent solutions company to make this year's list of 15 innovative healthcare organizations. Congratulations to the AMN team, from those who develop and deploy our technology, to everyone who has integrated these market-leading tools into our solutions to the benefit of healthcare professionals and clients. In the first quarter, the company generated $93 million in operating cash flow, enabling us to reduce our revolving credit balance by $60 million and add $45 million cash to our balance sheet. We do not control all the factors that will determine the trajectory of our businesses after our solid start to the year. Demand has not recovered to pre-pandemic levels in several of our businesses, such as Travel Nurse, interim leadership, and search, and the ongoing low demand in nurse staffing also affects our BMS revenue. Cost consciousness among hospitals and health systems is not a new condition. We continue to be focused on winning new clients, expanding our relationships with current clients, and improving our fill rates in direct and vendor neutral channels. Across our businesses, Competitors continue to grapple for position while serving a universe of cost-conscious clients and GPOs. We are seeing heightened competition in language services where industry consolidation has resulted in some large rivals and price competition has intensified. On the other hand, we have already seen some clients who chose other vendors but due to quality issues returned to AMN. we hold a distinct advantage in our high-quality, cost-competitive solutions. After two years of extraordinary growth, slower growth in Spanish language volume may indicate some impact from the current political and regulatory environment. Our sales activity in language services is healthy, and revenue growth could improve later in 2025 as new winds ramp. Across the spectrum of care, From preventative to urgent, acute and post-acute, we see clients with varying degrees of exposure to changes in tariffs and federal healthcare policies. Healthcare providers continue to be laser-focused on cost containment and the sustainability of their workforce amid continued growth in patient volumes. We have improved the ability of AMN to help clients find and implement the best solutions for optimizing labor-first quality, supply, and cost. I am confident that our focused expertise, diversified solutions, and high-quality service delivery will be increasingly valuable in the future as healthcare demand grows faster than supply. Now, I'll turn the call over to Brian for the details of our latest results and outlook.