Hello, and welcome to the AMN Healthcare Third Quarter 2021 Earnings Call. My name is Emma, and I will be your operator today. It's now my pleasure to hand the call over to Randy Reece, Senior Director of Investor Relations, to begin. Please go ahead.

Good afternoon, everyone. Welcome to AMN Healthcare's Third Quarter 2021 Earnings Call. A replay of this webcast will be available at ir.amnhealthcare.com, following the conclusion of this call. Details for the audio replay of the conference call are in our earnings release issued this afternoon. Various 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 and cautionary statements, including those identified in our most recently filed forms 10-K and 10-Q, 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. The 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 today are Susan Salka, Chief Executive Officer; Jeff Knudson, our incoming Chief Financial Officer; Kelly Rakowski, Group President and COO of Strategic Talent Solutions; Landry Seedig, Group President and COO of Nursing and Allied Solutions; and James Taylor, Group President and COO of Physician and Leadership Solutions. Also joining are Chris Schwartz, AMN Controller, who has served as our Interim Principal Financial Officer for the third quarter; and Vice President of Finance, Santhi Gullapalli. I will now turn the call over to Susan.

Thank you so much, Randy, and welcome, everyone, to our earnings call. It's hard to believe that this month marks the 20th anniversary of AMN becoming a public company. Over the past two decades, we have strategically evolved and built AMN into the largest, most diverse and consistently high-performing company in our industry. More importantly, we have created a culture that puts people and values first. At every opportunity, we take action to ensure that we are living up to our commitment to diversity, equity, equality, and inclusion. We have dramatically increased our impact in our communities by dedicating resources to important social issues and helping others achieve their goals in a sustainable way. I'm reminded every day how deeply our team members care about what we do and making a difference in this world. Our culture is truly special and unique. And so I want to start by thanking my incredible colleagues for all that you do and who you are. Just like our clients and healthcare professionals, our team members are working extraordinarily hard to do our part in this environment. Over the last two decades, I have also spoken frequently on these calls about the changes we expected to unfold. As the Baby Boomers began to reach retirement age, we anticipated intensified pressure on demand for and access to healthcare. The COVID-19 pandemic, however, has accelerated these changes in ways no one foresaw. Virtually every day, we see headlines about health systems losing workers faster than they can hire them. Staffing shortages are impacting access to and timeliness of care. The clinical workforce, on average, is getting younger, which means they are less experienced at a time when patient care is growing more complex. According to a recent poll, 30% of healthcare workers had quit or been laid off during the pandemic. Of those still employed, nearly one-fifth were considering leaving the healthcare profession. This immense pressure on the healthcare workforce has sparked labor activism, and for the next several years, the number and magnitude of strike events could exceed anything we've seen in the past. AMN and our entire industry are working harder than ever to help healthcare providers cope with a record labor shortage. We believe our role will be important and essential for years to come, providing workers where they're needed most. We can also enable many of those now on the sidelines to find work that meets their needs for flexibility in the future. As the leader in total talent solutions for healthcare, AMN takes our responsibility very seriously to strategically support our clients as they adjust their near- and long-term plans. Our telehealth and other workforce technology solutions are more critical than ever to provide innovative approaches to alleviate the labor shortages. And so we are investing heavily to ensure that we can meet the changing healthcare delivery models and the needs of our communities. Demand for our services is much stronger than we had anticipated, which is reflected in the better-than-expected third quarter results and our fourth quarter outlook. However, because there is significantly higher demand than the supply of clinicians, we believe that even with half of the demand that we are seeing today, we would have likely seen similar volume growth. Consolidated revenue in the third quarter was $878 million, 59% higher year-over-year, enabled by strong performance from all revenue segments. Nurse and Allied Solutions reported revenue of $627 million, up 64% year-over-year. Travel Nurse Staffing revenue grew 56% year-over-year. Our Allied Staffing team reached another record high with $136 million in third quarter revenue, up 62% year-over-year. Demand in the third quarter grew 72% over the second quarter level, and October orders were more than 20% above the third quarter average. The Physician and Leadership Solutions segment revenue for the third quarter was $151 million, 38% higher year-over-year, which is the best organic growth rate this segment has recorded in the company's history, as well as for all of our segments. For the fourth quarter, we expect revenue for the Technology and Workforce Solutions segment to be up approximately 50% compared with the prior year. We have added more team members than in any other year and continue recruiting to support our growth. We also have made important additions to our leadership team. One great example is Jeff Knudson, who has joined AMN as our Chief Financial Officer. His expertise will help us continue to build and execute on our mission and financial goals. At this time, I'd like to invite you, Jeff, to share a little bit about yourself.

Thank you, Susan. My family and I are excited to be joining AMN during such an interesting time. I reside in Dallas with my wife, Selena, and our youngest child, while our older two are in college. I am very eager to return to healthcare and to be part of an organization with a diverse workforce and staffing solutions. I look forward to collaborating with Susan and the entire management team at AMN to uphold and enhance the company’s legacy of industry leadership while providing long-term value to our team members, healthcare professionals, clients, the communities we serve, and our shareholders. I would also like to express my gratitude to Chris, Santhi, and the entire financial organization for their leadership over the past few months. I am eager to meet and work with many of you on this call soon.

Thank you so much, Jeff. We're so glad to have you here. Since Jeff is on day three of his job, he won't necessarily be participating in the Q&A. We're fortunate to have Chris and Santhi here to help us out with questions. Continuing on the people front, we recently announced that Nishan Sivathasan is stepping into the role of Chief People Officer effective January one. Nishan joined the AMN family over two years ago as our Head of Strategy and M&A. His leadership during this pandemic has been extremely valuable, making this an obvious choice for me and the team. I also want to recognize Landry Seedig, who is celebrating his 20th anniversary with AMN this week. Time flies when you're having fun, right Landry? He is a great example of how AMN obtains great talent in our acquisitions and has certainly made the most of this opportunity. Now, I will turn the call over to Chris, who will provide more insights on our financial results.

Thank you, Susan, and good afternoon, everyone. Third quarter revenue of $878 million was 11% above the upper end of our guidance, with all three segments showing outperformance. Consolidated revenue grew 59% year-over-year and 2% sequentially. Gross margin for the quarter was 34.8%, which was 130 basis points higher than the prior year and up 210 basis points sequentially. The year-over-year improvement was driven primarily by a favorable workers' compensation actuarial adjustment this year compared with an unfavorable one a year ago as well as an increase in high-margin labor disruption revenue. For Travel Nurse Staffing, our largest business, revenue grew 56% over the prior year with volume up 27% and the average bill rate up about 23%. In the third quarter, Nurse and Allied revenue was $627 million, 64% higher than the prior year and up slightly sequentially. Fourth quarter guidance: we are projecting consolidated revenue to be in a range of $1.13 billion to $1.15 billion, approximately 80% higher than the prior year.

Thank you so much, Chris. We are proud of how our team has responded in this environment, helping our healthcare professionals and clients during a very critical time. Some influences driving nursing and allied demand will certainly subside a bit over time. However, we believe the largest driver of labor shortages will endure and that the long-term growth opportunities for AMN are stronger now than they ever were before. Looking specifically at 2022, we believe volumes will grow year-over-year across all of our businesses. The need for healthcare organizations to have a total talent solutions partner has been escalated to a higher level, and we are very energized about the future.

Our first question comes from Tobey Sommer from Truist Securities.

Emma, the callers are telling us that they can hear each other, but we can't hear them.

There might be a setting that needs to be changed. This is my 80th earnings call, and we have never had this happen before. So that is the environment in which we live today.

Analysts, if you could email questions to me, I would be happy to read them.

While we're waiting for those questions, I'm sure we have some things to share proactively. James, perhaps I'll ask you to first share a little bit more detail about the great performance in Physician and Leadership Solutions and the drivers of both revenue growth and lower gross margins.

Overall, our revenue was $151 million, an increase of 8% sequentially and the highest revenue quarter since the third quarter of 2018. However, our gross margin and operating margins decreased quarter-over-quarter. This decline can be attributed to three main factors. First, we had a higher proportion of Locums business in the third quarter, which tends to have lower margins. Second, there has been a shift towards lower margin specialties. Finally, we did not benefit from the favorable impact of our provider liability insurance reserves in the third quarter that we experienced in the previous quarter. These three factors contributed to the decrease in our margins.

That's super helpful.

Jeff Silber of BMO asks Susan, you called out labor disruption as a long-term driver. How do you go to market with this without offsetting unions and other groups?

When we first entered the neighborhood destruction business, it was actually in response to requests from our clients. Currently, there are several labor negotiations taking place across the country. In the third quarter, we experienced $23 million in labor disruptions or strikes, and we have factored in approximately $14 million for our guidance in the fourth quarter. These situations are unpredictable. There are events occurring in the market that we are not involved with, and there are others for which we are making preparations.

Operator, I'm told that the people on the call cannot hear us now.

We just experienced a bit of technical difficulty. We're sorting this out now.

Okay, great. I am being told that now folks can hear us. Maybe we'll try another analyst's question.

Yes. This is from Tobey Sommer of Truist. Susan, could you put together your segment comments for 2022?

I apologize. Something has happened with the conference call technology. Landry, why don't you share a bit about Nurse and Allied and some of the trends?

We will continue to grow that number, and our productivity per person is flat. We're continuing to do that, and I expect we will continue that next year.

That sounds great. Thank you.

The same trends that are affecting us in Allied would impact the MS business also.

Emma, let's return to those questions.

Our next question comes from A.J. Rice from Credit Suisse.

Is the strength in VMS and interim RPO a normalized run rate or is this reflective of some pent-up demand?

The underlying shortage will continue to drive strong demand and good volume within VMS. The need for virtual language services continues to grow quarterly, and our other technology businesses are seeing increased interest as clients seek broader solutions to address the workforce shortage long-term.

We're really delighted to see the balance of our businesses come back strong. The needs of our client base are working through a multitude of strategies to address the shortages impacting healthcare services across the board.

Emma, let's return to those questions.

Our next question comes from A.J. Rice from Credit Suisse.

We've seen about the same percentage of fill, although our total fills have gone up, which is a good story.

So you are seeing some strength in areas that were adversely impacted or did not participate in the COVID surge?

Yes, absolutely. The underlying weakness will impact the total demand in the short term, but our solutions are seeing value in the market overall.

Can you share with us how much hiring you've been able to do for recruiters or revenue-generating roles?

We have growth of about 30% in our FTEs year-over-year across the enterprise.

We have been increasing our producer count for five consecutive quarters.

What your thoughts are regarding the long-term growth rate that we should think about post-pandemic for your different business lines?

Our growth prospects have certainly increased. We believe there are opportunities for double-digit growth as we get through any headwinds.

Are you looking at new assets or focusing on integration and ramping up cross-selling opportunities?

We have opportunities to continue to invest and expand the capability to penetrate in different ways with the clients we have. But we are also looking at new capabilities in the tech space.

There are a lot of negotiations occurring across the country. We expect some lumpiness in our results going forward, but it won't be overly impactful.

How do you think the level of labor activism will impact the space over the next few years?

We believe that labor disruption events will be more intense and larger. This is the most intense period of activism I've ever seen, and I think it will impact wages and staffing paradigms.

There are no further questions, so I'll hand back to the team for closing remarks.