Good afternoon, and thank you for standing by. Welcome to AMN Healthcare Second Quarter 2025 Earnings Call. At this time, all participants are in listen-only mode. After the 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 first speaker today, Randy Reese, Vice President, Investor Relations. Please go ahead.

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

you Randy and welcome to our second quarter conference call. Second quarter revenue of 658 million was at the upper end of our guidance range. Adjusted EBITDA of 58 million and gross margin of 29.8% exceeded the high end of guidance. At the end of the second quarter, the balance on our revolving line of credit was down to $70 million after we repaid $80 million during the quarter and we expect further debt reduction this quarter. Through the quarter, uncertainty about government policy impacts placed the healthcare sector in a more cautious stance compared with the first quarter, directly impacting our industry. The strongest indications we had of clients' uncertainty were declines in staffing orders and extensions. Travel nurse orders in June were 15% lower than March, and our rebook retention rate for travelers fell through the quarter. Our language services business also billed fewer minutes in June compared with May. Hiring freezes hampered our physician search business and likely affected demand and volume in locum tenens. Our academic Medical Center clients have taken the strongest measures to reduce spending in response to cuts in federal funding for research. Academic Medical Centers made up about 20 percent of our consolidated revenue year to date. Other hospitals have seen some slowing in patient utilization, though still growing year over year. With the new tax bill now finalized, our clients have some clarity on future changes to reimbursement and their insured population mix much of which will happen gradually over several years. July saw improvement in key metrics across most of our businesses. In Nurse and Ally, traveler extension rates rebounded sharply in July which underscores that our clients still have the need for flexible staffing. Travel Nurse is largely an acute care business, and while orders have been stable since the second half of June, they are running below prior year levels, and we need to see higher order levels to regain volume growth. Allied draws from a more diverse client base, with about half of its business coming from non-acute care. While travel nurse orders fell more than 10 percent from March to July, Allied orders in July we're up three percent from March, benefiting from our strength in outpatient therapy, rehabilitation, and imaging. We also anticipate a strong year for our allied schools business, built on robust bookings in the first half selling season, and the benefit of innovative solutions like our Televate virtual care platform. Q3 is the seasonally lowest quarter of the year for school staffing and our improved bookings will be more visible in Q4, where we expect double-digit volume growth from the prior year. Our international nurse staffing business is positioned to resume sequential growth in volume and revenue in the fourth quarter, with growth trends continuing into 2026. We expect this business to have outsized growth opportunities over the next two to three years as visa retrogression dates move forward. Language services revenue was up 1% year-over-year in the second quarter, with utilization up 6% from a year ago, mostly offset by competitive pricing pressure. Utilization declined from May to June and grew again in July, and our sales pipeline continued to increase and progress over the past three months. Revenue for our locum tenant's business was flat year-over-year in the second quarter, and we see good opportunity to deliver consistent year-over-year growth starting in the third quarter. Locum tenant's demand so far this quarter is 5% higher than Q2. We recently completed the last stages of the MSCR integration and are seeing traction in adding more locum programs into our existing MSP clients as clients seek consistency and cost efficiency in their locum spend. We expect MST revenue to reach a historic high this year with higher same client sales and new opportunities for additional growth in locum. Our labor disruption business has had a successful start to the year, and we could have more activity from now into 2026, supporting a number of clients in large upcoming collective bargaining agreements. Our recently completed AI-enabled event management technology has had positive client reaction and combined with our deep expertise, enables us to scale to support more clients. The staffing industry analysts recently released 2024 market share rankings showed that AMN retained market share in an intense competitive environment in travel nurse and allied while gaining share due to acquisition and locum tenants. In May, AMN was named the largest healthcare leadership in search form by Modern Healthcare. This year to date, our growth strategy to serve all market channels has progressed, supported by our work-wise technology infrastructure. Our operational speed and automation initiatives have resulted in steadily improving fill rates in both our AMN-led MSPs and vendor-neutral programs. These efforts have been greeted by a healthy pipeline of vendor-led and vendor-neutral MSP opportunities, and we are also building up our client list for direct staffing relationships. We continue to make good progress on diversifying our revenues and building on our technology-enabled services. AMN Passport is one of our best success stories. Passport, our industry-leading app for health care professionals, now covers travel and per diem nurse, allied and locum tenon specialties. We also have extended Passport's capabilities to manage float pool workers and labor disruption events. These additions have given a boost to Passport, which recently surpassed 300,000 registered users. More significant is the impact Passport is making on our efficiency and user engagement. More than 20% of our Nurse and Ally placements are now assisted by Passport automation. We have seen other early successes from our rollout of AI capabilities across all facets of our operations, and this will continue to be a key area of focus for us. In early July, we completed the sale of our SmartSquare scheduling software to a new commercial business partner, Simplr. This transaction enables us to expand the potential work-wise network of technology partners to deliver workforce planning, staffing, and talent deployment to the benefit of our current and future clients. In two and a half years, we have rebuilt our ability to address all channels of the healthcare staffing market. We have stabilized and in some areas modestly grown our staffing market share, and we are well positioned to win as demand recovers. For the near term, we continue to manage our cost structure and drive for operational efficiency. Our financial strength and level of innovation stand out in the industry at a time when many competitors are struggling. Now, I will hand over the call to Brian for a review of second quarter results and third quarter guidance.

Thank you, Carrie, and good afternoon, everyone. Second quarter consolidated revenue was $658 million at the high end of guidance driven primarily from better-than-expected performance in our nurse and allied segments. Revenue was down 11% from the prior year and down 5% sequentially. gross margin for the second quarter was 29.8%, 80 basis points above the high end of our guidance range. Year-over-year, gross margin decreased to 120 basis points, while sequentially gross margin increased by 110 basis points. Consolidated SG&A expenses were $155 million, compared with $149 million in the prior year and $148 million in the previous quarter. Adjusted SG&A, which excludes certain expenses, was $140 million in the second quarter, compared with $137 million in the prior year and $136 million in the previous quarter. The sequential SG&A increase was primarily due to a $5 million unfavorable professional liability reserve adjustment and $2 million in higher bad debt expense, more than offsetting lower employee costs and other expense management efforts. The majority of the professional liability reserve adjustment was recorded in the Nurse and Allied segment, while the bad debt charge was in the physician and leadership solution segment. Second quarter nurse and allied revenue was $382 million, down 14% from the prior year, driven mainly by lower volume, partially offset by labor disruption revenue. Sequentially, segment revenue was down 8%, primarily due to lower labor disruption revenue and seasonally lower volume. Labor disruption revenue in the quarter was $16 million, compared with $39 million in the first quarter and zero in the prior year quarter. Year-over-year, segment volume decreased 16%, average rate was down 2%, and average hours work down 1%. Sequentially, volume was down 3%, while the average rate and hours work were both flat. Travel nurse revenue in the second quarter was $208 million, a decrease of 25% from the prior year period and 4% from the prior quarter. Allied revenue in the quarter was $146 million, down 4% year-over-year, and 1% sequentially. Nurse and allied gross margin in the second quarter was 23.9%, an increase of 10 basis points year-over-year. Sequentially, gross margin was up 120 basis points due to lower payroll taxes and a favorable business mix. Moving to physician and leadership solution segment, second quarter revenue of $175 million was down 6% year-over-year, driven by lower volume across the search and interim leadership businesses. Sequentially, revenue was flat. Welcome 10's revenue in the corridor was $143 million, flat year-over-year and up 1% sequentially. Interim leadership revenue of $23 million decreased 25% from the prior period and 5% sequentially. Search revenue of $9 million was down 29% year-over-year and 2% sequentially. Gross margin for the position and leadership solution segment was 28.2%, down 230 basis points year-over-year on a lower bill pay spread and an adverse revenue mix shift. Sequentially, gross margin increased 90 basis points, mainly due to a favorable sales allowance adjustment in the locum's business. Technology and workforce solutions revenue for the second quarter was $102 million, down 9% year-over-year, primarily driven by declines in our VMS and outsourced solutions businesses. Sequentially, revenue was flat. Language services revenue for the quarter was $76 million, up 1% both year-over-year and sequentially. VMS revenue for the quarter was $19 million, a decrease to 31% year-over-year and 2% sequentially. Segment gross margin was 55.1%, down 500 basis points from the prior year period, primarily due to lower revenue from VMS and outdoor solutions sequentially gross margin declined 40 basis points at the start of july we completed the sale of smart square for 75 million with 65 million paid at closing and 10 million in an 18 month note this business was included in our technology workforce solution segment starting in the third quarter this transaction will reduce annualized revenue by approximately 17 million and adjusted by about 6 million second quarter consolidated adjusted EBITDA was $58 million, down 38% year-over-year and 9% sequentially. Adjusted EBITDA margin for the quarter was 8.9%, down 380 basis points from the prior period and 40 basis points sequentially. During the second quarter, we recorded a non-cash food will impairment charge of $110 million related to our physician and leadership solution segment. We also recorded a non-cash intangible asset impairment charge of $18 million related to our Nurse and Allied segment. Second quarter net loss was $116 million, driven by the goodwill and intangible asset impairment charges. This compared with net income of $16 million in the prior year period and a net loss of $1 million in the prior quarter. Second quarter gap diluted loss per share was $3.02. Adjusted earnings per share for the quarter was $0.30 compared to $0.98 in the prior year period and $0.45 in the prior quarter. Day sales outstanding for the quarter is 54 days, which was nine days lower than a year ago and one day lower sequentially. Operating cash flow in the second quarter was $79 million and capital expenditures were $10 million. The quarter and year-to-date cash flow has been favorably impacted by an approximately $50 million increase in client deposits related to labor disruption events. These deposits will be repaid during the third quarter, somewhat offsetting the proceeds received from the SmartSquare sale. As of June 30th, we had cash-in equivalence of $42 million and total debt of $920 million, including $70 million drawn on a revolver. We ended the quarter with a net leverage ratio of 3.3 times to 1. Moving to third quarter guidance, we project consolidated revenue to be in a range of $610 to $625 million. This revenue guidance includes $5 million related to labor disruption support. Gross margin is projected to be between 28.7% and 29.2%. Reported SG&A expenses are projected to be approximately 23% of revenue. Operating margin is expected to be 6% to 6.5% and adjusted EBITDA margin is expected to be 7.7% to 8.2%. Additional third quarter guidance details can be found in today's earnings release. And now let's go back to Kerry for some closing

remarks. Thank you, Brian. Before I open the call for questions, I want to acknowledge the recent passing of AMN's former chairman Doug Wheat last month. Doug will always be a pivotal figure in both the growth story of AMN and as a friend and mentor to so many of us. Doug had served on on our board of directors for 26 years and was the board's chairman for 17 years. Doug's legacy lives on in the values he championed, the people he impacted and the continued impact of AMN on the lives of healthcare professionals and patients across the country. We are grateful for his extraordinary contributions and extend our deepest sympathies to his wife, Laura and his entire family. I know I speak for many in saying how deeply he will be missed. Among the many great things about AMN, our people and our culture are the foundation of what makes AMN so special. And we are grateful for the many years Doug was a part of the wonderful AMN team. Operator, you can open the call for questions now.

Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. And our first question comes from Trevor Romeo with William Blair. Your line is now open.

Hi, good afternoon, everybody. Thanks for taking the questions. The first one I had was you would just love, I guess, any more color on how your clients are kind of thinking about their contingent labor needs at this point. I think, Kerry, you noted the slower decision making in Q2, followed by some improvement in July. I think there were a few comments you already had on kind of the demand levels. But we'd love maybe just more color on how you saw the trends move throughout the quarter and maybe more importantly, what your clients are telling you as far as, you know, where their contingent labor needs could go forward with the various uncertainties out there.

So let me take demand first and then I'll maybe more broadly talk about what we're seeing in terms of their needs around workforce solutions. So I mentioned this in the call, but what we really saw as we kicked off the year is a very healthy start to the year. We saw year-over-year increases in demand. As we got into the second quarter, we really started to see the uncertainty of some pending policy changes, whether it was around tariffs, around health care funding as part of the spending bill, and for academic medical centers potential cuts in research budgets. And so we saw that uncertainty result in delays in decision making throughout the second quarter. What we've seen really starting in July, and we, you know, we're only kind of a week into August, but we have seen demand stabilize in NERS. We are seeing demand up in allied and in locum. And we saw extension rates in July rebound sharply back. And so we've seen some of the delayed decision-making really start to break free a little bit as we've entered the third quarter. Now, what we experienced in the second quarter plays through to what we see in the third quarter. And so some of the stabilization or increase in demand, we would expect to start to come through more in the fourth quarter or towards the end of the year. If I step back and think a little bit about what clients are thinking about contingent labor, we really are at a period where for many clients, they have normalized both their utilization of labor, and when we look at where premium contingent cost over fully loaded permanent cost is, we're down to high single digits. This past quarter we were more at nine percent, which is at a really kind of low end of what you would see historically, and so we've seen that contingent spend normalized as systems were focused on permanent hiring and they were focused on building flexibility, whether that was in flex pools or other ways. We are very focused on helping them across all of their total talent solutions. So throughout this, we help them in permanent hiring. We help them with building up their internal float pools, whether we're running that or they're running that, whether they want to do programs or they want to do per diem. So we are seeing the start of broader conversations about how you're really going to manage and sustain a quality, cost-effective workforce in the future. Things like predictive analytics, more data. We're seeing interest in program management, particularly in historically decentralized areas like locum. And so we would expect, Trevor, those trends to continue, particularly as organizations are dealing with still increasing patient utilization and a limited supply of clinicians.

Interesting. Yeah, thank you very much, Carrie. That's really helpful color. And then I guess I also just wanted to ask on your gross margins, particularly in the Nurse and Allied segment. I think they picked up nicely from last quarter. So I was just wondering if you could give us a little bit more color on the drivers there. I think Brian talked about a favorable mix, but did you actually see kind of underlying spreads improve a bit there or the competitive activity stabilize? And then what's your outlook for spreads in kind of the core

Nurse and Allied moving forward? Yeah, thanks, Trevor. Yeah, the underlying spreads in Nurse and Allied have been more stable. So, yeah, we did have a little bit of better post-market performance from what we guided in both the Nurse and Allied and Physician and Leadership segments. But most that was more either a couple of one-time items like sales allowance at a payroll tax benefits in it in the second quarter as well and then we picked up a little bit of additional international firm placement revenue at a very high margin so there were a couple of good guys in the quarter which helped out same on physician leadership we had a sales allowance reduction so with the and same thing in locums you we didn't see an improvement in margin and so as we think about our focus right now is actually I'm just trying to drive as as much volume as possible, and there's been pretty stable bill rates, and so that has led to pretty stable margins, and we would expect to see that as we go into the third and fourth quarter

as well. Got it. Yeah, nice to see some stabilization there. All right, thank you both.

I really appreciate it. Thank you. Our next question comes from Kevin Fishbeck with Bank of

America. Great, thanks. I was just wondering if you could provide a little more color, I guess, and when you kind of think that these numbers will have kind of actually bottomed. I guess when you talk about some of the firming and demand that you're seeing, are those comments like seasonally adjusted? I know that oftentimes timing through the year can change when orders start to rebound or would be expected to rebound. So I just wanted to get more color of kind of one you thought we might start to see year-over-year growth again.

Yeah. Number one, welcome back. It's nice to hear your voice. A couple of things in demand. if I look at second quarter year over year and what we're seeing in clients, if you look at the decrease in utilization, the vast majority of that year-over-year decrease came from a concentrated number of clients. And the majority of that concentrated group of clients was academic medical centers. And so we saw the biggest change in utilization from a relatively small group of clients. In the remainder of the utilization declines year over year, it was concentrated in clients that were at the tail end of rolling off that we had lost in 2023 or 2024. So think of that as really that tail end has has played through. If we look at what we're seeing in the early days of Q3, we are seeing academic medical centers in aggregate their volumes up from what we saw over the past four quarters. So Kevin, what I would say is in terms of where we have seen some of the declines, we're seeing even into this quarter some stabilization of those clients, and you're always going to have puts and takes in any given month or quarter for some client. But I think some of the challenges that we had seen over the past year, we've seen that play out over the past couple quarters.

Yeah, I just add, so when you, as Carrie mentioned at the beginning of the call, when we saw the extension rates decline during the second quarter, that had some nominal impact on q2 but you we're going to feel it more in the third quarter which is reflected in the guidance and the the sequential decline in in travel nurse and again that the decline in orders that also you know we started to feel a little bit in april but more so in may and june that also compounded the impact we're seeing on on volume in the third quarter orders have been stable now for the last you know two plus months um still at a lower level than they were earlier in the year but they've you know with extension rates picking back up again and stability in order levels it feels like we're you know we're kind of at this current normal level right now we've had some better booking trends and so our expectations that go through the back half of the year um just like conservatively is that we're you know we'll we'll start to see more winter orders come in the next you know 60 days and we're already having some conversations with clients about that and so that as you think about the shape of our volume you'll you'll see some declines from July through the end of the quarter, which is already really just a function of what happened in the second quarter. But as we continue to look at our booking trends and moving into the fourth quarter, that will start to turn back positive on a month-to-month basis heading through the fourth quarter and as we move into 26 as well. So in the overall, it feels like the backdrop is stable. And now it's a question of just if that extension rate is kind of the first sign of clients getting back to a little bit more normal buying behavior, the next thing we'd want to see is orders start to improve again as well. And in the meantime, of course, we're not just waiting for that to happen. We're making very proactive steps around improving our fill rates with the orders that we have, building our pipeline of MSP opportunities to access more orders, and we talked about improving our internal capture on third parties as well. All those things are gaining traction, And so that would be incremental as you move into the back half of the year.

Okay. And then I guess I appreciate the commentary around, you know, legislative uncertainty, I guess, particularly among teaching hospitals. But I guess we did also see during the quarter sequential declines in growth rates of volumes. You know, I guess to what extent have hospitals, you know, been talking to you about that and how it might relate to their need for temp staffing?

What we're seeing is when you get into kind of July and into August, we've started to see demand either stabilize in nurse and or pick up in allied and in locum. We would typically see Kevin and clients have told us to expect similar timing this year. We would start to see winter order needs come in the end of this month and early September. so we kind of look at demand both in terms of what we've been seeing in the base business and then we would expect in the next you know six weeks eight weeks to start seeing some future orders come in around some of their winter

needs but I don't you know the rate of growth in in patient volume has slowed down it's still up you know it was up it was up last year it's still up on a year-over-year basis. I don't think that's really the major, you know, driver of any change in client's buying behavior. I think it's been some of these other factors that we've talked about that have been, you know, more impactful, but really haven't had, you know, client feedback around with the buying slowing down, so that that's a big driver of any change in their buying.

All right, great. That's helpful. Thank you. Next question comes from AJ Rice with UBS.

Thanks. Hi, everybody. Maybe the flip side of these academic medical centers and hospitals generally putting hiring freezes on and being a little tougher on the permanent hires might be a step up in people being willing to consider travel nurse assignments or allied assignments. Have you seen – what's happening with respect to people, you know, new applicants and so forth?

So we have seen – we still have healthy supply. Take aside, you know, certain specialties or locations. This really is about demand, not about supply. And so if you have an order that is priced right, we don't have a challenge filling it. And in fact, even when people will pull up and look at demand week to week, if you have orders that come in that are priced appropriately, that will get filled immediately. It won't even have more than a couple of days of time. And so it's not a supply challenge right now and an interest challenge. It's a, is the package attractive enough for them to sign on? That is true overall. I'd say that's particularly true in locums where you still see, you know, healthy demand in locums and have seen that throughout the year. It really is, you have to have attractive pay packages to be able to get them to sign on because they have a number of options.

Yeah, but AJ, it's a good point. I think that we've seen that slow down in, some slow down in healthcare hiring. They're still hiring, but usually there's a lag effect of that. So if we go through, if they continue to slow down on their permanent hiring and you have, you know, kind of normal attrition, it takes a few months, but then we've seen that before where then you start to, they start to feel more of a pinch on their staffing levels. And that's where you can see demand pick up. But it hasn't, we haven't seen that yet, but it's certainly, we've seen that trend historically.

Okay. I know you called out some wins in MSP. I wondered if you could step back. There was some debate a while back, but it seemed like it was normalizing people either moving away from MSP or people churning contracts generally. What are you seeing now? Are you seeing more activity? And that's part of what you're picking up. I know the market is somewhat disruptive with deals out there and so forth. Is that creating opportunities? What's happening on the MSP side and your ability to potentially grab incremental share?

Yeah, what we have seen so far is coming out of COVID, we saw two things around programs. Number one is almost no matter what model a client was in, they weren't happy with what the outcomes were during COVID. So they were open to new models. We still see clients that may look at different models, but we've seen, you know, I'd say a little bit of normalization of that sentiment that we saw coming out of COVID. The other thing we saw is we saw a bias towards vendor neutral, really in 2023 and 24. In 2025, if you look at our pipeline, we have a slight bias back to supplier-led MFPs. and so you are seeing some of that normalized. We've had a couple of examples in our pipeline where we had a client who may have gone to a tech-only solution. They're having challenges filling and so they're open now to going back in more of a risk-aligned, risk-sharing type of program like a supplier-led MSP. So our strategy has been to serve clients in the model that they choose, whether that's a supplier-led or vendor neutral MSP, whether that's direct. We have had success in all of those over the past, you know, 18 months, which is really why you saw an SIA with the recent market share rankings, us holding our market share. And so we want to serve that growing group of clients that wants MSPs. We also simultaneously want to serve clients who want vendor-neutral and direct relationships and build from there.

Okay. Thanks a lot. Our next question comes from Toby Sommer with Truist.

Thanks. I want to start out with just a question on the guidance. How do we square the revenue below and in gross margin down but SG&A better? What are the moving pieces? Bonific rules came to mind, but perhaps there are other moving pieces you could illustrate for us.

Well, I'll maybe just start on the SG&A. As you mentioned in the prepared remarks, our second quarter SG&A, we've done really good work. The team's done great work in trying to manage our costs effectively, you know, made process and automation changes to be able to bring down some of our costs. And so that was really playing through in the second quarter, but then we had the actuarial adjustment and let hire bad debt that, you know, collectively was, you know, $7 million and change. So if you remove that and look at the underlying SG&A, you're looking at something, you know, in the low 130s. And then with the sale of Smart Square, kind of the third quarter is the first quarter reflecting about a $2 million reduction in SG&A from that as well. So we're in the low 130 range of SG&A, which is what's – that's adjusted SG&A, so excluding stock-based comp and a small amount of the right back. That's where you end up with the guidance that we gave for the third quarter and reflecting through the margin. On the gross margin side, I kind of mentioned the Q2 had a a couple of unique items that were favorable. The smart square divestiture, it's about a 30 basis point impact to gross margin on a consolidated basis, about 100 to the segment. But if you think about the second quarter actual to the third quarter guide, kind of the midpoint, again, about 30 basis points related to that sale. And then the balance of it is a few things that happen in the second quarter that aren't going to occur in the third. Underneath that, you've got pretty stable margin profile across the businesses. I appreciate that. Thank you.

With respect to strike opportunities going forward, are you still managing that aspect of your business only for kind of your best core clients where you can manage the whole experience or are you pursuing business sort of more broadly in a different fashion?

We are using our strike support to support our clients, so both our MSP clients as well as our VMS clients, and there is strong interest in both of those groups. The technology that we have built enables us to be able to scale more effectively in supporting strikes without disrupting our core business. The challenge we had historically, Toby, is when we were supporting a strike for a strategic client, it really took so many resources away from our core business that it was hard to do both simultaneously. We've made a lot of operational efficiencies. Brian just talked about a number of them and the technology that we built that we can do both and we were able to do both in the fourth and first quarter um in the strikes that we supported we have a healthy pipeline that we were intentional about building for the back half of the year that we are supporting a number of clients in some large cbas that they are negotiating you never know if a strike is going to go or not um but we feel like this is both an important capability that matters greatly to clients that we want to support and we have a differentiated ability to support it now than we did in the past thanks if i could sneak one

in and then i'll get back into one more about language services um what's the growth algorithm and expectation um from here after i think what you described as a as a slowdown in 2q thank you

Yeah, let me tell you a little bit about what we're seeing in language services. So, first, we love this business. It is an important service that we provide, both in acute and non-acute settings. When we look at quarter over quarter, we had, you know, mid-single-digit growth in utilization, but that was off that we've seen significant competitive pressure on price per minute. And so that resulted in very, you know, from a net basis, very, very modest growth. We would expect those trends to continue. From a top line standpoint, the softness in utilization that we saw really kind of in the second quarter going into the third quarter, when we talk to others in the industry, they are seeing something similar. So our focus is not just on, you know, continuing to strongly manage this business, but we have built over the past couple quarters a strong pipeline that we would expect to progress as we go through the next couple quarters that would help us get back some stronger top-line growth ending this year going into next year.

Thanks, Tanya. Our next question comes from Brian Tankwilett with Jeffries.

Hey, good afternoon. You've got Jax Levin on. Just wanted to maybe turn a little more broadly just to the competitive environment and appreciate your comments on sort of being able to hold share with some of the latest SIA data that's out there. But maybe thinking about opportunities to potentially win share, I guess the chatter we get is that plenty of the private comps of yours are under significant pressure. And I'm just wondering if you could maybe just dive into a little bit of what you're seeing in terms of actions, whether it's on price or other things from the competitors in the landscape. And then maybe just how you think about what does that look like on a multi-year basis if you are to sort of win out in the market? Is it more of just the same and then waiting for others to capitulate, or is there more action that needs to be taken? Thanks.

Yeah, so a couple of things. One, I'll talk about just the, you know, kind of winning share dynamics. And then I know we've also started to see what we think are the beginnings of consolidation that will continue. The industry is still relatively fragmented. So in terms of what we're seeing from a competitive dynamic, our goal is to gain share. And so stabilizing and in some cases growing our share, which happened in 2024, is a step to gaining market share. We are very focused on how we do that in a couple of ways. One is how do we continue to build on net new clients, on strategic net new clients. So net new wins, expansions, net of losses, year to date, we are up modestly. We continue to build our pipeline and progress our pipeline to be able to get new clients to be able to sell more of our solutions to. Second is how do we continue to expand, which we have had success in. I'd say particularly in locum strike and to a lesser degree in language services to some of our MSP clients? And then how do we fill more? So Brian talked about this a little bit earlier in some of our operational initiatives. We have higher fill rates, both on our internal capture of our MSPs, but also on our own VMS platforms. And you will see us continue to focus on those areas. So that is the trifecta of how we continue to work on gaining market share. From a competitive standpoint, we think that the challenging position that some of our competitors are in is going to give us an ability to continue to have differentiated solutions to be able to win more clients with. Strike is a great example of a very important solution for clients that have unionized populations that we now can uniquely support in ways that other competitors can't. What we're doing with Passport and being able to support float pools is another great example. So we think that we will extend our differentiation during this period, you know, with competitors having challenges. We've also seen the beginnings of some consolidation over the past two quarters. We think that will continue into 2026. and we think there's always opportunity over the coming years that that consolidation will benefit

us. Okay, got it. Really, really helpful, Color. I'll just jump with one quick follow-up here and just say on the international piece, appreciate some of the updated commentary there. I'm wondering if you can just dig in a little bit deeper in terms of exactly we see the turn probably later this year, but then what the path to sort of grow that over time, I guess what the checks we would want a CR to know that that is on track and the extent of the recovery and revenues that you can

get on a multi-year basis. Thanks. So let me give you a little bit of the shape of what that will look like and then between Brian and I we can talk through you know different scenarios of what that could look like. So we expect an international that we will go back to growth. It will be very modest in the fourth quarter. The bigger thing for us in the fourth quarter is that this has been a significant headwind for us for the past two years as retrogression has taken place. So us getting back to being neutral with a very slight positive in the fourth quarter is important to us. As we get into 2026, we would expect even under conservative assumptions for us to grow both revenue and EBITDA in the double digits, depending on different scenarios of how much forward movement of retrogression you would get. That could range more highly in terms of how you get the recovery. It'll be a multi-year recovery. But we know enough now, and even under conservative assumptions, that you will get into double-digit growth, both top and EBITDA, for international

next year. You know, all the talk of immigration is to say it hasn't, we haven't really seen it directly impact the business as much, maybe a little bit of a slowdown in some of the State Department processing. But, you know, those visas that are allocated still exist. And so, you know, we still see, you know, good demand from clients. There's still a, you know, we have a large and growing pipeline. And so to Carrie's point, it's, as we talked about before, it's still feel like it's not a matter of if just a matter of when it's just very difficult to predict that you know how the dates will continue to move forward we know they will they'll be you know about a new budget you're coming up soon we typically see in the heels of that you know movement on the dates and so we're you know we're just being a little bit cautious on on our forecast of what that will look like if you went back into history we've had retroaggression there's been periods where there's been pretty significant movement forward but we just it's just really hard to predict at this point um what's going to happen but it's a serious point even in very conservative scenarios we we absolutely expect to resume growth um particularly as we move into 26 it's just that the magnitude is still the part that we can't quite predict and the the last piece

that i'll that i'll mention is whether it's you know the hospital association or other lobbying groups there's really broad support for bringing in clinicians it is an incredibly important source of clinical supply really across for all hospitals but I'd say really acutely for rural hospitals and so we would expect you know there to continue to be a strong level of support into 2026 got it super

helpful. I appreciate all the questions. Our next question comes from Mark Marcon with Baird.

Good afternoon. Most of my questions have been asked, but I wanted to just dig in a little bit deeper on some of them. So, starting with visa retrogression, can you remind us, like, what was the peak level of revenue on the international nursing side? Where is it currently so that we have a base level that we're going to build double digits from?

Brian's getting you.

Yeah, I mean, it just is a remark. We've come down by about $100 million from the peak in 2023. So we were at about $225 million of revenue in 2023. We're running right now more like $125. So that's when we've talked previously about just getting back to that level, that $100 million, and the flow through from that. And we have pipeline that could take us beyond that, but that gives you a kind of org magnitude, and our EBITDA margin is north of 30% in that business. Great. And then on the labor disruption

side, it sounds like we're building it. We did $16 million last quarter. We're building in $5 million for this quarter, but it sounds like there are a lot of CBAs. So is that five million

a really conservative number? We have line of sight to the five million in the third quarter. We always put mark five million in because we can't really, you know, with any degree of precision, like both timing and magnitude, be able to predict more than that. There is upside in the third quarter from that number. If some of those CBAs, if the union strike, there is also upside potential in the fourth quarter as well based on the CBAs that we know we are supporting. So there is both third quarter and fourth quarter upside. Yeah, but it's a bigger, the more likely larger revenue

opportunity would be in fourth and first quarter next year. There are a couple of smaller things it could happen in the third quarter, but again, it's just, we have good, like I said, we have contracted work that supports the guidance we gave. There's a couple others that may or may not happen that are smaller, but, you know, I don't, so conservative, you know, maybe, but I think we're, I think it's appropriate based on what we know right now. Okay, and then on the

competitive environment, we all know there's a number of players out there that are struggling, And then we also have consolidation. In terms of the players that are struggling, are there any sort of negative impacts that you're currently seeing from a pricing perspective, just as they struggle to maintain viability? or is pricing staying from a competitive perspective, staying, you know, fairly stable? And then, you know, how should we think about pricing as we do get that stabilization or rationalization in terms of industry capacity?

I, you know, I think what we've seen more in terms of the pricing is just the competitive environment, and we've really been in that for several years. So I don't know that anything has incrementally changed. I think, Mark, when you look at, you know, we've had relative stability in bill rates in nursing. You know, revenue per day in locums has continued to increase, but you've seen relative stability in our nurse and ally business. So what you'd really want to see as you get into 2026 is you still have underlying increases in, you know, wages that are going on. And you'd really want to see that reflected in bill rates because the premium spread from contingent to permanent is high single digits. And so I don't know that there's a lot of room to go from there. So that's what you want to see more competitively. And I think that, you know, regardless of financial position, there's going to be an interest in, you know, all players being able to maintain some level of margin. Right. And then you have the Smart

Square divestiture. You're not anticipating any other divestitures, are you? No, you know,

from a background standpoint, and I know we talked about this in the press release, What we were seeing in SmartSquare, which really led to the strategic decision of a divestiture, is it's a great platform. It's a great team. That buy and the implementation was increasingly becoming part of a broader ERP buy and decision. And it was tied in a lot of cases to time and attendance. And so for us, we looked at it as a win-win, which is we found a great partner in home in Simpler. It was a great outcome for the clients of that platform. And for us, it allows us to focus our CapEx spend on areas that are growing more strongly. And it really created for us an ability to more robustly partner with all these different providers that also have some scheduling systems. We had kind of a competitive friction with them in the past. So we view that whole opportunity as a very strategic decision.

Right. And then just from a financial perspective, you've got that $50 million that you're going to be paying back, but then you ended up getting the cash. How are you thinking about, and then you also mentioned that you plan to pay some more of the revolver. Where do we think cash flow is going to be for the third quarter?

Well, we'll, on an operating cash flow, we'll have a use of cash because of that deposit refund. But, Ed, to your point, we'll have all the proceeds from that sale. So maybe I'll answer a little bit differently. And we're getting, like other companies, some cash tax benefit from the tax bill. We would expect all of our balance to be somewhere around $30 million at the end of the third quarter. So that's probably what you're trying to get to there. We, you know, we're obviously continuing to make really good progress on reducing that revolver balance and have, you know, more and more line of sight to getting that fully paid off here, if not at the end of the year, you know, shortly thereafter.

Fantastic. Thank you.

Our next question comes from Jeff Silber with BMO Capital Markets.

Hey, good afternoon. This is Lionel for Jeff. I was just hoping to dig into the underlying bill rate and volume assumptions for the third quarter nurse and allied guide. I think you mentioned pretty stable bill rates and perhaps some softness on the volume front. I was just hoping to get some more color there.

Yeah, I mean, you kind of characterized it pretty well. The bill rates have been pretty stable. And so we, you know, really, as Karen mentioned, that would be, you know, that would unlock more volume if, you know, clients are still testing low rates in certain markets and certain clients. And so that, you know, we can fill, but it takes longer. Or in some cases, they just, they can't be filled by us or anybody else. When we get an appropriate price order, we're able to fill them very quickly. So our, the, as you look at the guide we gave for the third quarter, it really, for the travel nurse business, it's that, that decline is really all, all volume driven. We haven't, we haven't really seen any, you know, change in, in hours of work as well. So that's the bulk of the, of the sequential change. Allied is also a down a little bit, partly just, again, with the school year. This is kind of the low point in the season. And that's probably the main drivers for the nurse and allied segment.

Got it. And then just for the follow-up,

I was wondering what your exposure is to rural hospitals.

You know, we pulled that up a couple months ago. We don't have, I'd say, kind of disproportionate exposure to rural versus urban. So I'd say it's not kind of oversized or undersized.

Great. Thank you.

This concludes the question and answer session. I would now like to turn it back to Carrie Grace for closing remarks.

Thank you for joining our second quarter earnings call. Our entire team appreciates your interest in AMN Healthcare.

Thank you for your participation in today's conference. This does conclude the program.

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