Core Viewpoint - AMN Healthcare Services, Inc. has appointed Brian Scott as Chief Financial Officer and Chief Operating Officer, effective November 21, 2024, as the company aims to enhance its operational model and financial performance [1][3]. Group 1: Leadership Changes - Brian Scott returns to AMN after a 17-year tenure, having previously served as CFO and Chief Accounting Officer from 2011 to 2021, during which he led significant growth, including a fourfold increase in quarterly revenue and a 13x increase in adjusted EBITDA from Q4 2010 to Q2 2021 [2][3]. - Scott's appointment follows the announcement that Jeffrey Knudson will step down as CFO on November 8, 2024, to pursue another opportunity outside the healthcare staffing industry [3]. Group 2: Company Strategy and Outlook - The company is focused on enhancing operational excellence and delivering strong financial returns, with Scott bringing extensive industry expertise and a proven track record in financial management [3]. - Scott expressed confidence in AMN's ability to capitalize on future opportunities through business diversification and strategic technology investments [3]. Group 3: Company Background - AMN Healthcare is recognized as a leader in total talent solutions for healthcare organizations in the U.S., addressing workforce challenges to improve clinical outcomes and access to care [5]. - The company provides a comprehensive network of healthcare professionals and a customizable suite of workforce technologies [5].

Core Insights - AMN Healthcare has launched WorkWise, a technology suite designed to unify various workforce management technologies for healthcare systems, enhancing efficiency and cost management [1][2] - WorkWise integrates predictive scheduling, automated workforce management, and AI-driven clinician engagement to optimize staffing processes and reduce costs [1][2] - The solution aims to improve healthcare delivery by enabling hospitals to better predict staffing needs and manage personnel across different job types [1][2] Group 1 - WorkWise provides an end-to-end solution for healthcare organizations, addressing complex workforce challenges and adapting to evolving needs [2] - The technology suite enhances staff efficiency, reduces burnout and turnover, and improves financial planning for healthcare systems [2] - By leveraging automation and data analysis, WorkWise helps build engaged talent networks and increases speed-to-fill for staffing needs [1][2] Group 2 - AMN Healthcare positions itself as a leader in total talent solutions for healthcare organizations in the U.S., focusing on solving workforce challenges to improve clinical outcomes [4] - The company offers a comprehensive network of healthcare professionals and customizable workforce technologies to meet the needs of healthcare providers [4]

Group 1 - AMN Healthcare Services, Inc. (AMN) is experiencing significant activity in the options market, particularly with the Dec 20, 2024 $30.00 Call showing high implied volatility, indicating potential for a major price movement [1] - Implied volatility reflects market expectations for future stock movement, suggesting that investors anticipate a significant event that could lead to a rally or sell-off [2] - Analysts have mixed views on AMN Healthcare, with one increasing earnings estimates for the current quarter while three have decreased theirs, resulting in a consensus estimate drop from 64 cents to 63 cents per share [3] Group 2 - The high implied volatility in AMN Healthcare's options may indicate a developing trading opportunity, as seasoned traders often seek to sell premium on such options to capture decay [3]

[AMN Healthcare Second Quarter 2024 Results](index=1&type=section&id=AMN%20Healthcare%20Second%20Quarter%202024%20Results) [Financial & Business Highlights](index=1&type=section&id=Financial%20%26%20Business%20Highlights) The company reported Q2 2024 revenue of $741 million and exceeded earnings expectations through expense management while advancing strategic initiatives and reducing debt Q2 2024 Financial Highlights (vs. Q2 2023) | Metric | Q2 2024 | % Change YoY | | :--- | :--- | :--- | | Revenue | $740.7M | (25%) | | Gross profit | $229.8M | (30%) | | Net income | $16.2M | (73%) | | GAAP diluted EPS | $0.42 | (73%) | | Adjusted diluted EPS | $0.98 | (59%) | | Adjusted EBITDA | $94.1M | (42%) | - Q2 revenue met expectations, while **earnings were better than expected**, primarily driven by expense management and beneficial discrete items[4](index=4&type=chunk) - Operational and strategic highlights for the quarter include: - The ShiftWise Flex platform rollout surpassed **50% of vendor-neutral client spend**, with the first MSP client migrations completed - Technology and Workforce Solutions contributed **41% of operating income** from the three segments - Language services revenue **grew 18% year-over-year**[4](index=4&type=chunk) - The company generated strong cash flow from operations of **$100 million**, enabling an **$80 million debt reduction** in Q2, with a net leverage ratio of **2.6:1**[4](index=4&type=chunk)[11](index=11&type=chunk) - CEO Cary Grace noted that while large clients continue to reduce contingent labor spend, there are **promising signs of improvement** in the travel nurse market[5](index=5&type=chunk) [Detailed Financial Results (Q2 2024)](index=2&type=section&id=Detailed%20Financial%20Results%20(Q2%202024)) Consolidated revenue fell 25% YoY to $741 million, driven by a decline in the Nurse and Allied segment, while gross margin contracted due to a business mix shift [Consolidated Performance](index=2&type=section&id=Consolidated%20Performance) Q2 consolidated revenue decreased 25% YoY to $741 million, with declines in net income and key margins, though SG&A expenses improved as a percentage of revenue Q2 2024 Consolidated Results | Metric | Q2 2024 | Q2 2023 | % Change YoY | | :--- | :--- | :--- | :--- | | Revenue | $741M | $991M | (25%) | | Net Income | $16M | $61M | (73%) | | Gross Margin | 31.0% | 33.3% | (230 bps) | | Operating Margin | 5.1% | 9.2% | (410 bps) | | Adjusted EBITDA Margin | 12.7% | 16.3% | (360 bps) | - The year-over-year decrease in SG&A costs was primarily driven by **lower employee compensation** amid reduced placement volumes[10](index=10&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) Segment results were mixed, with a sharp 36% decline in Nurse and Allied Solutions revenue contrasting with 6% growth in Physician and Leadership Solutions Q2 2024 Revenue by Segment (YoY) | Segment | Q2 2024 Revenue | % Change YoY | | :--- | :--- | :--- | | Nurse and Allied Solutions | $442M | (36%) | | Physician and Leadership Solutions | $186M | +6% | | Technology and Workforce Solutions | $112M | (11%) | - Within the Nurse and Allied segment, travel nurse staffing revenue **dropped 42% year over year** and 17% sequentially[6](index=6&type=chunk) - Within the Physician and Leadership segment, locum tenens revenue **grew 17% year over year**, largely due to the MSDR acquisition[7](index=7&type=chunk) - Within the Technology and Workforce segment, language services revenue **grew 18% year over year**, while vendor management systems revenue fell 41%[9](index=9&type=chunk) [Financial Position and Cash Flow](index=3&type=section&id=Financial%20Position%20and%20Cash%20Flow) The company generated $100 million in operating cash flow, ending the quarter with $48 million in cash and a net leverage ratio of 2.6 to 1 - Cash and cash equivalents totaled **$48 million** at the end of Q2 2024[11](index=11&type=chunk) - Cash flow from operations was **$100 million** for the second quarter, while capital expenditures were **$27 million**[11](index=11&type=chunk) - The company ended the quarter with total debt of **$1.195 billion** and a net leverage ratio of **2.6 to 1**[11](index=11&type=chunk) [Business Outlook (Q3 2024)](index=4&type=section&id=Business%20Outlook%20(Q3%202024)) Q3 2024 revenue is projected at $660-$680 million, a 20-23% YoY decline, with an adjusted EBITDA margin forecast of 10.6% to 11.1% Q3 2024 Guidance | Metric | Guidance | | :--- | :--- | | Consolidated revenue | $660 - $680 million | | Gross margin | 30.7% - 31.2% | | SG&A as % of revenue | 22.0% - 22.5% | | Operating margin | 2.1% - 2.9% | | Adjusted EBITDA margin | 10.6% - 11.1% | - Q3 2024 Segment Revenue Outlook (YoY): - **Nurse and Allied Solutions:** Expected to be **down 32-34%** - **Physician and Leadership Solutions:** Expected to **grow 12-14%** - **Technology and Workforce Solutions:** Projected to be **10-12% lower**[12](index=12&type=chunk) - Other Q3 2024 financial estimates include depreciation of **$20 million**, non-cash amortization of **$22 million**, interest expense of **$15 million**, and an adjusted tax rate of **27%**[13](index=13&type=chunk) [Financial Statements](index=9&type=section&id=Financial%20Statements) The unaudited statements show significant YoY declines in revenue and net income, with total assets of $2.77 billion and six-month operating cash flow of $180.9 million [Condensed Consolidated Statements of Comprehensive Income](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) For the three and six months ended June 30, 2024, both revenue and net income experienced significant year-over-year declines Income Statement Highlights (Three Months Ended June 30) | Metric (in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Revenue | $740,685 | $991,299 | | Gross Profit | $229,827 | $330,281 | | Income from Operations | $37,682 | $91,663 | | Net Income | $16,237 | $60,906 | [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2024, total assets were $2.77 billion and total liabilities were $1.89 billion, both decreasing from year-end 2023 Balance Sheet Summary (as of June 30, 2024) | Account (in thousands) | Amount | | :--- | :--- | | **Assets** | | | Cash and cash equivalents | $48,038 | | Total current assets | $704,757 | | Goodwill | $1,116,307 | | **Total Assets** | **$2,771,327** | | **Liabilities & Equity** | | | Total current liabilities | $573,890 | | Revolving credit facility | $345,000 | | **Total Liabilities** | **$1,894,468** | | **Total Stockholders' Equity** | **$876,859** | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations was $180.9 million for the first six months of 2024, with cash primarily used for investing activities and debt repayment Cash Flow Summary (Six Months Ended June 30) | Activity (in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Net cash from operating activities | $180,901 | $241,101 | | Net cash used in investing activities | $(43,731) | $(54,859) | | Net cash used in financing activities | $(119,081) | $(247,744) | [Supplemental and Non-GAAP Information](index=6&type=section&id=Supplemental%20and%20Non-GAAP%20Information) This section reconciles GAAP to non-GAAP measures like Adjusted EBITDA and provides supplemental segment data and key operating metrics [Non-GAAP Reconciliation](index=12&type=section&id=Non-GAAP%20Reconciliation) Q2 2024 GAAP Net Income of $16.2 million is reconciled to Adjusted EBITDA of $94.1 million and Adjusted Diluted EPS of $0.98 Q2 2024 GAAP to Non-GAAP Reconciliation | Metric (in thousands) | Amount | | :--- | :--- | | Net Income (GAAP) | $16,237 | | Adjustments (Interest, Taxes, D&A, etc.) | +$77,850 | | **Adjusted EBITDA** | **$94,087** | | | | | Net Income (GAAP) | $16,237 | | Adjustments (Amortization, other costs, tax effects) | +$21,095 | | **Adjusted Net Income** | **$37,332** | [Supplemental Segment Data](index=13&type=section&id=Supplemental%20Segment%20Data) Q2 2024 supplemental data details segment gross margins and key operating metrics, such as average travelers and physician days filled Q2 2024 Segment Gross Margins | Segment | Gross Margin | | :--- | :--- | | Nurse and allied solutions | 23.8% | | Physician and leadership solutions | 30.5% | | Technology and workforce solutions | 60.2% | - Key operating metrics for Q2 2024 include: - **Average travelers on assignment:** 10,302 (down from 13,597 in Q2 2023) - **Physician days filled:** 56,244 (up from 49,976 in Q2 2023)[38](index=38&type=chunk) [Guidance Reconciliation](index=14&type=section&id=Guidance%20Reconciliation) The Q3 2024 guidance reconciles the forecasted GAAP Operating Margin of 2.1%-2.9% to the non-GAAP Adjusted EBITDA Margin of 10.6%-11.1% Q3 2024 Guidance Reconciliation (Operating Margin to Adj. EBITDA Margin) | Metric | Low End | High End | | :--- | :--- | :--- | | Operating margin | 2.1% | 2.9% | | Depreciation and amortization | 6.6% | 6.4% | | Share-based compensation | 0.9% | 0.9% | | Acquisition, integration, and other costs | 0.9% | 0.9% | | **Adjusted EBITDA margin** | **10.6%** | **11.1%** | [Other Information](index=5&type=section&id=Other%20Information) This section includes the company overview, forward-looking statements, and key risk disclosures [About AMN Healthcare](index=5&type=section&id=About%20AMN%20Healthcare) AMN Healthcare is a leader in total talent solutions for U.S. healthcare organizations, offering a comprehensive suite of staffing and workforce services - AMN Healthcare provides total talent solutions including direct staffing, managed services programs, temporary staffing, permanent placement, vendor management systems, and language services[16](index=16&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) This section outlines forward-looking projections and cautions that actual results may differ due to numerous risk factors - Forward-looking statements in the release cover topics such as future demand, wage rates, expense management, and the Q3 2024 financial projections[20](index=20&type=chunk)[22](index=22&type=chunk) - Key risk factors that could affect future results include clients increasing their own staffing efficiency, adjustments in the utilization of temporary professionals, economic downturns, pricing pressures, and the ability to recruit and retain quality healthcare professionals[23](index=23&type=chunk)[25](index=25&type=chunk)

Core Points - Jeffrey Knudson will step down as CFO of AMN Healthcare effective November 8, 2024, to pursue an opportunity outside the healthcare staffing industry [1][2] - AMN Healthcare plans to announce a new leader for an expanded CFO/COO role before Mr. Knudson's departure [1] - The company reaffirms its financial guidance for the third quarter of 2024, with results to be reported on November 7, 2024 [3] Company Overview - AMN Healthcare is a leader in total talent solutions for healthcare organizations in the U.S., addressing workforce challenges to improve clinical outcomes and access to care [4] - The company provides a comprehensive network of healthcare professionals and a customizable suite of workforce technologies [4]

Core Insights - AMN Healthcare Language Services has launched Strategic Partnership Solutions (SPS) to enhance language access programs in healthcare organizations [1][2] - SPS aims to transform language services from a cost center to a strategic component of patient care, potentially reducing costs associated with longer hospital stays and missed appointments [2] - The initiative addresses challenges such as limited resources and compliance issues while improving patient outcomes through enhanced language access [2] Service Offerings - SPS provides a comprehensive range of language services, including video remote interpreting, over-the-phone interpreting, in-person interpreting, and translation [1] - The service includes tailored solutions based on a thorough analysis of each organization's language access program [1] Industry Impact - The launch of SPS is viewed as a significant milestone for the healthcare industry, positioning language services as essential for improving patient care [2] - Pilot sites like Yuma Regional Medical Center have reported positive outcomes, including faster connections to interpreters and improved quality of interpretation [3]

The healthcare industry has been a critical part of the economy for a long time. According to a McKinsey & Company report, the healthcare industry is expected to grow at 7% from 2022 to 2027. Many healthcare companies heavily rely on trials, which need to be FDA approved in order to be put on the market. This makes it extremely hard to predict a company’s future performance. Successful trials could bring in potentially billions of dollars in revenue. However, a failed trial will likely result in stock-price ...

Core Viewpoint - AMN Healthcare Services, Inc. reported a significant decline in both adjusted earnings per share (EPS) and revenues for the second quarter of 2024, although adjusted EPS exceeded consensus estimates. The company anticipates continued revenue declines in the upcoming quarter, raising concerns about its financial performance and market position [1][2][7][9]. Revenue Performance - AMN Healthcare's revenues for Q2 2024 were $740.7 million, reflecting a 25.3% decrease year over year, but slightly above the Zacks Consensus Estimate by 0.3% [2]. - The Nurse and Allied Solutions segment generated revenues of $442.4 million, down 35.8% year over year, with travel nurse staffing revenues declining by 42% [3]. - The Physician and Leadership Solutions segment saw revenues of $186.1 million, an increase of 5.6% year over year, driven by a 17% rise in locum tenens revenues [4]. - The Technology and Workforce Solutions segment reported revenues of $112.2 million, down 10.9% year over year, with language interpretation services growing by 18% [4]. Margin Analysis - Gross profit for AMN Healthcare fell by 30.4% to $229.8 million, with gross margin contracting by 229 basis points to 31% [5]. - Adjusted operating profit decreased by 37.1% to $80.8 million, and the adjusted operating margin contracted by 206 basis points to 10.9% [5]. Financial Position - At the end of Q2 2024, AMN Healthcare had cash and cash equivalents of $48 million, down from $50.6 million at the end of Q1 2024. Total debt decreased to $1.195 billion from $1.275 billion [6]. - Cumulative net cash provided by operating activities was $99.5 million, a decline from $197.7 million a year ago [6]. Guidance - For Q3 2024, AMN Healthcare expects revenues to be in the range of $660 million to $680 million, indicating a decline of 20-23% compared to the previous year [7]. - The company anticipates a 32-34% decline in revenues for the Nurse and Allied Solutions segment and a 10-12% decline for the Technology and Workforce Solutions segment, while projecting a 12-14% increase for the Physician and Leadership Solutions segment [8]. Market Outlook - Despite disappointing overall performance, there are positive signs in the Physician and Leadership Solutions segment and improvements in the travel nurse market, which may provide some optimism for future growth [9].

Core Insights - AMN Healthcare Services reported revenue of $740.69 million for Q2 2024, a year-over-year decline of 25.3% and an EPS of $0.98 compared to $2.38 a year ago, with a revenue surprise of +0.33% over estimates and an EPS surprise of +30.67% [1] Revenue Performance - Physician and leadership solutions revenue was $186.07 million, below the average estimate of $193.97 million, but showed a year-over-year increase of +5.6% [4] - Nurse and allied solutions revenue was $442.40 million, exceeding the average estimate of $433.30 million, but reflecting a year-over-year decline of -35.8% [5] - Technology and workforce solutions revenue was $112.22 million, slightly above the average estimate of $110.97 million, with a year-over-year decrease of -11% [6] Segment Operating Income - Nurse and allied solutions segment operating income was $46.21 million, slightly below the average estimate of $46.66 million [7] - Technology and workforce solutions segment operating income was $47.26 million, exceeding the average estimate of $43.51 million [7] - Physician and leadership solutions segment operating income was $21.66 million, below the average estimate of $24.42 million [7] Stock Performance - AMN Healthcare shares have returned +27.7% over the past month, contrasting with the Zacks S&P 500 composite's -6.5% change, but the stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance in the near term [8]

Company Performance - AMN Healthcare Services reported quarterly earnings of $0.98 per share, exceeding the Zacks Consensus Estimate of $0.75 per share, but down from $2.38 per share a year ago, indicating a 58.8% year-over-year decline [1] - The company achieved a revenue of $740.69 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 0.33%, but down from $991.3 million in the same quarter last year, reflecting a 25.3% decrease [1] - Over the last four quarters, AMN Healthcare has consistently surpassed consensus EPS and revenue estimates [1] Market Performance - AMN Healthcare shares have declined approximately 19.8% since the beginning of the year, contrasting with the S&P 500's gain of 9% [2] - The current Zacks Rank for AMN Healthcare is 4 (Sell), indicating expectations of underperformance in the near future [4] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $0.64 on revenues of $700.02 million, and for the current fiscal year, it is $3.15 on revenues of $2.97 billion [4] - The trend for estimate revisions ahead of the earnings release was unfavorable, which may impact future stock performance [4] Industry Context - The Medical Services industry, to which AMN Healthcare belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, suggesting potential challenges for stocks within this sector [5] - Sharecare, Inc., another company in the same industry, is expected to report a quarterly loss of $0.03 per share, with revenues projected to decline by 18.3% from the previous year [5]