AMN Healthcare Services Inc

Good day, and thank you for standing by. Welcome to the AMN Healthcare's third 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 will then hear an automated message advising 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 speaker today, Randy Reese, Vice President, Investor Relations. Please go ahead.

Good afternoon, everyone. Welcome to AMN Healthcare's third 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 10K and 10Q, our earnings release, 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 Brian Scott, Chief Financial and Operating Officer. I will now turn the call over to Carrie.

Thank you, Randy, and welcome to today's conference call. Since our last call, AMN has continued to adapt to changes in the marketplace and position the company to win as our industry transitions from recovery to growth. Third quarter revenue of $634 million was $9 million above the high end of our guidance range. Consolidated gross margin was near the upper end of guidance. and SD&A expenses were better than expected. Adjusted EBITDA for the third quarter was $57.5 million, which was 9.1% of revenue, 90 basis points above the high end of our guidance range. After experiencing demand softness in the second quarter, staffing demand recovered moderately in the third quarter, extension rates rebounded, and travel nurse winter orders came in slightly favorable to prior year. At the same time, permanent hiring activity in the healthcare sector fell notably in the third quarter according to a private survey of job openings. The different directions of contingent and permanent recruiting suggest that employers are beginning to seek more flexibility in their workforce strategies to meet increasing patient utilization. This is an increasingly attractive strategy as we estimate that the spread between travel nurse fill rates and fully loaded permanent nurse compensation is at a historical low. Bill rates maintain stability through the last nine months, and there are a few indications suggesting that some clients are reconsidering a bill rate strategy in which rates have not kept up with increased costs. In fact, we expect bill rates for nurse and allied staffing to be up modestly year over year in the fourth quarter for the first time in three years. Our consolidated outlook for the fourth quarter calls for revenue a little better than $720 million at the midpoint, or just over $620 million excluding labor disruption revenue. Our guidance includes about $5 million extra SG&A expenses in Q4 related to labor disruption support. While conditions for individual business lines vary, we benefit from the diversification among our 20 solutions, which keep us well-positioned to serve clients' evolving needs and desire for strategic partners over the long run. All three business segments beat consensus revenue estimates in the third quarter, led by 12 million upside in nurse and allied solutions. Part of the nurse and allied beat came from higher than expected labor disruption revenue. As projected, Lower Q2 demand and extensions flowed through to lower Q3 revenue, so less than we expected. As new demand and extension offers improved in the quarter, our team executed well to capture this demand and set us up for higher travel nurse and allied revenue in Q4. Demand improved modestly through the third quarter into October, including higher winter orders. For the fourth quarter, we expect about $100 million in labor disruption revenue. Total nurse and allied revenue will be up low single digits year-over-year or down approximately 6% to 8% excluding labor disruption. This will be our best year-over-year revenue comparison for the segment in three years. In our physician and leadership solutions segment, revenue grew 2% sequentially in locum tenens and interim leadership, while search revenue was stable. We were pleased to record 3% year-over-year growth in locum tenants revenue. The highlight in locum was days booked for MSP clients, which grew by 15% year-over-year, including a nice boost from new client wins. For the fourth quarter, physician and leadership solutions revenue is projected to be down sequentially by approximately 6% due primarily to seasonally lower locums volume. For our technology and workforce solutions segment, third quarter revenue was $7 million lower than the prior quarter. Most of that drop came from the sale of our smart square business on July 1st. VMS revenue was $2 million lower and language services revenue less than $1 million lower. In the fourth quarter, We expect technology and workforce solutions revenue to be down mid-single digits compared with the third quarter, with seasonally lower language services minutes and the lingering runoff from previously discussed client transitions in our VMS and language services businesses. I want to touch on the subject of gross margins. Our consolidated gross margin has declined this year, caused by an unfavorable revenue mix shift and competitive pressures in staffing and language services. As nurse and allied demand moves from stability to growth, we expect staffing growth margins to stabilize. We expect improvement in international staffing revenue and other high margin services to lift our consolidated gross margin in 2026. In a normal demand recovery, we also would expect to see travelers' average hours worked increase and placement mix improve, both of which would create margin growth opportunity. AMN has differentiated itself in many ways this year, including from a financial perspective. At the end of the third quarter, we had a zero balance on our revolving line of credit down from $210 million at the end of 2024. In early October, we completed a debt refinancing transaction that strengthened our financial position and improved our corporate debt rating. Our earliest debt expiration was extended out to 2029, our revolver was downsized to reduce carrying costs, and its debt leverage covenant increased to give us more operating flexibility. The next phase of our strategy to gain market share is in view, as we see an increasing number of prospects seeking more complete talent solutions. Our performance and client retention remains strong year to date, and our latest net promoter scores were significantly improved from last year. Our aggressive plan to improve technology, processes, and customer focus paid off with a 700 basis point year-over-year improvement in client satisfaction. We continue to expand our number of service lines provided to clients, and we see interest from a number of strategic clients in consolidating their decentralized local spend. We are also making progress on our strategy to fill more of the available demand by improving our speed to fill. For example, over the past 12 months, we've doubled our fill rate in our vendor neutral program. Overall, competition for new clients and renewals has seen less motivation from clients to switch vendors as they prioritize other initiatives. However, we remain confident that our client-first approach and industry-leading spectrum of talent solutions will win over the coming quarters and years. Now, I will turn over the call to Brian to get more details on our latest financial results and business outlook.