Wall Street expects a year-over-year decline in earnings on lower revenues when Cross Country Healthcare (CCRN) reports results for the quarter ended June 2025. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The earnings report might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, ...

I last covered Cross Country Healthcare, Inc. (NASDAQ: CCRN ) in April, when I laid out the nature of the company's acquisition by Aya Healthcare. I rated the stock a sell, arguing that there was a good chanceI am a software developer by trade who focuses on finding value in the market wherever it may lie. I'm looking mainly in small caps for opportunities that provide asymmetric upside. I'm also interested in generating income through my investments, which leads me to look at high dividend yields that are ...

Forward Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act, and are subject to the "safe harbor" created by those sections. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include words such as "expects", "anticipates", ...

Company Performance - Cross Country Healthcare (CCRN) reported quarterly earnings of $0.06 per share, exceeding the Zacks Consensus Estimate of $0.04 per share, but down from $0.19 per share a year ago [1] - The earnings surprise for this quarter was 50%, while the previous quarter saw a negative surprise of -63.64% [2] - The company posted revenues of $293.41 million for the quarter, missing the Zacks Consensus Estimate by 3.67%, and down from $379.17 million year-over-year [3] Market Position - Cross Country shares have declined approximately 24.1% since the beginning of the year, compared to a decline of -4.7% for the S&P 500 [4] - The current Zacks Rank for Cross Country is 4 (Sell), indicating expectations of underperformance in the near future [7] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.09 on revenues of $306.93 million, and for the current fiscal year, it is $0.36 on revenues of $1.24 billion [8] - The staffing firms industry, to which Cross Country belongs, is currently ranked in the bottom 15% of over 250 Zacks industries, suggesting potential challenges ahead [9]

Revenue Performance - Consolidated revenue for Q1 2025 decreased by 22.6% year-over-year to $293.4 million, down from $379.2 million in Q1 2024, primarily due to declines in travel nurse and allied staffing volumes and average bill rates [117][126]. - Nurse and Allied Staffing segment accounted for approximately 83% of total revenue in Q1 2025, while Physician Staffing represented about 17% [115][116]. - Revenue from Nurse and Allied Staffing decreased by $89.9 million, or 27.1%, to $242.3 million in Q1 2025, driven by an 18.8% decline in professionals on assignment [140]. - Physician Staffing revenue increased by $4.1 million, or 8.8%, to $51.1 million in Q1 2025, attributed to higher rates and a favorable specialty mix [143]. - Average revenue per FTE per day in Nurse and Allied Staffing decreased by $37, or 9.3%, to $360 in Q1 2025 [139]. - Total days filled in Physician Staffing decreased by 4.6% to 22,692 in Q1 2025, while revenue per day filled increased by $277, or 14.0%, to $2,253 [145]. Financial Performance - Net loss attributable to common stockholders for Q1 2025 was $0.5 million, compared to net income of $2.7 million in Q1 2024, marking a decline of 118.2% [117][125]. - Cash and cash equivalents as of March 31, 2025, totaled $80.7 million, with cash flow from operating activities at $5.7 million for the quarter [118]. - Corporate overhead decreased to $15.1 million in Q1 2025 from $17.6 million in Q1 2024, representing 5.2% of consolidated revenue [146]. - Net cash provided by operating activities decreased by $0.3 million to $5.7 million in Q1 2025 compared to $6.0 million in Q1 2024 [150]. - Cash and cash equivalents were reported at $80.7 million as of March 31, 2025, with working capital increasing by $1.6 million to $216.2 million [147]. Expenses - Direct operating expenses decreased by 22.2% to $234.8 million in Q1 2025, representing 80.0% of total revenue, up from 79.6% in the prior year [127]. - Selling, general and administrative expenses decreased by 17.0% to $52.5 million, but as a percentage of total revenue, they increased to 17.9% from 16.7% [128]. - Acquisition and integration-related costs of $2.0 million were incurred in Q1 2025 related to the pending Aya Merger, with no such costs in Q1 2024 [131]. Tax and Income - Income tax benefit for Q1 2025 was $0.4 million, compared to an expense of $1.0 million in Q1 2024, primarily due to a decrease in book income [137]. Merger and Acquisition - The Aya Merger is expected to close in the second half of 2025, pending regulatory approvals and other customary closing conditions [119].

Financial Performance - First quarter 2025 revenue was $293.4 million, a decrease of 23% year-over-year and 5% sequentially [5]. - Net loss attributable to common stockholders was $0.5 million, compared to net income of $2.7 million in the prior year [5]. - Adjusted EBITDA for Q1 2025 was $8.6 million, representing 2.9% of revenue, down from $15.3 million or 4.0% of revenue in the prior year [5]. - For the three months ended March 31, 2025, Cross Country Healthcare reported a revenue of $293,408,000, a decrease of 23% compared to $379,174,000 for the same period in 2024 [26]. - Adjusted EBITDA for the same period was $8,619,000, with an adjusted EBITDA margin of 2.9%, down from 4.0% in the previous year [22]. - The net loss attributable to common stockholders for Q1 2025 was $(490,000), compared to a net income of $2,692,000 in Q1 2024 [22]. Revenue Breakdown - Nurse and Allied Staffing revenue was $242.3 million, a decrease of 27% year-over-year [6]. - Physician Staffing revenue increased by 9% year-over-year to $51.1 million [7]. - Nurse and Allied Staffing revenue per FTE per day decreased to $360 in Q1 2025 from $397 in Q1 2024 [30]. Cash Flow and Assets - Cash flows provided by operations were $5.7 million, down 5% year-over-year [8]. - As of March 31, 2025, the company had $80.7 million in cash and cash equivalents with no debt outstanding [10]. - Cash and cash equivalents at the end of Q1 2025 were $80,697,000, a slight decrease from $81,633,000 at the end of Q4 2024 [23]. - The total current assets decreased to $325,199,000 as of March 31, 2025, down from $335,000,000 at the end of 2024 [23]. - Total liabilities decreased to $158,025,000 as of March 31, 2025, compared to $170,292,000 at the end of 2024 [23]. - The company reported a net cash provided by operating activities of $5,681,000 for Q1 2025, down from $6,011,000 in Q1 2024 [28]. Costs and Expenses - The company incurred acquisition and integration-related costs of $2,041,000 in Q1 2025, compared to no such costs in Q1 2024 [26]. - The Company incurred a settlement expense of $1.2 million and recorded a $1.8 million recovery related to a previous loss in Q4 2024 [33]. - Legal and other losses in Q1 2024 amounted to $3.7 million, representing an offer to settle a lawsuit and estimated costs related to an unrecoverable asset [33]. - Impairment charges for Q1 2024 and Q4 2024 were related to right-of-use assets and included a write-off of goodwill and intangible assets [33]. Strategic Focus - The company is focused on driving productivity and leveraging AI automation for improved profitability [3]. - The merger with Aya Healthcare is expected to be consummated in the second half of 2025 [3]. Financial Metrics and Definitions - Adjusted EPS, a non-GAAP financial measure, is presented as a useful supplement to reported EPS, reflecting the Company's underlying business performance [33]. - Contribution income is defined as income from operations before various costs, used by management to assess segment performance [33]. - Gross profit margin is calculated by dividing gross profit by revenue from services, excluding allocated depreciation and amortization expense [33]. - Average revenue per FTE per day is calculated by dividing Nurse and Allied Staffing revenue per FTE by the number of days worked [33]. - Days filled is calculated by dividing total hours invoiced during the period by 8 hours [33]. - Revenue per day filled is calculated by dividing reported revenue by days filled for the period presented [33]. - Corporate overhead includes unallocated executive leadership and centralized corporate functional support costs [33].

Core Insights - Cross Country Healthcare (CCRN) reported a revenue of $309.94 million for the quarter ended December 2024, reflecting a year-over-year decline of 25.1% and an EPS of $0.04 compared to $0.29 a year ago [1] - The reported revenue exceeded the Zacks Consensus Estimate of $306.2 million by 1.22%, while the EPS fell short of the consensus estimate of $0.11, resulting in a surprise of -63.64% [1] Financial Performance - The company experienced a return of -7.5% over the past month, compared to a -3.5% change in the Zacks S&P 500 composite, and currently holds a Zacks Rank 3 (Hold) [3] - Nurse and allied staffing reported FTEs of 7,621, surpassing the two-analyst average estimate of 7,441 [4] - Physician staffing generated revenue per day filled of $2,085, exceeding the two-analyst average estimate of $1,910, with days filled in HRS totaling 25,427 compared to the estimated 19,207 [4] - Revenue from physician staffing was $53.01 million, above the four-analyst average estimate of $51.59 million, marking a year-over-year increase of 13.1% [4] - Revenue from nurse and allied staffing was $256.93 million, slightly above the four-analyst average estimate of $254.81 million, but represented a year-over-year decline of 30% [4]

Core Insights - Cross Country Healthcare (CCRN) reported quarterly earnings of $0.04 per share, missing the Zacks Consensus Estimate of $0.11 per share, and down from $0.29 per share a year ago [1] - The company posted revenues of $309.94 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.22%, but down from $414.04 million year-over-year [3] Earnings Performance - The earnings surprise for the quarter was -63.64%, with the company previously expected to post earnings of $0.10 per share but actually producing $0.12 per share in the prior quarter, resulting in a positive surprise of 20% [2] - Over the last four quarters, Cross Country has surpassed consensus EPS estimates two times [2] Revenue Insights - The company has topped consensus revenue estimates four times over the last four quarters [3] - Current consensus EPS estimate for the coming quarter is $0.08 on revenues of $301.78 million, and for the current fiscal year, it is $0.54 on revenues of $1.25 billion [8] Market Performance - Cross Country shares have declined approximately 6.6% since the beginning of the year, compared to a decline of -1.8% for the S&P 500 [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [7] Industry Context - The Staffing Firms industry, to which Cross Country belongs, is currently ranked in the bottom 22% of over 250 Zacks industries, suggesting potential challenges ahead [9] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Cross Country's stock performance [6]

Financial Performance - Consolidated revenue for the year ended December 31, 2024, declined 33.5% year-over-year to $1.3 billion, down from $2.0 billion in 2023, primarily due to declines in the Nurse and Allied Staffing segment [166][175]. - The net loss attributable to common stockholders for 2024 was $14.6 million, compared to a net income of $72.6 million in 2023, marking a 120.0% decrease [166][174]. - Revenues from Nurse and Allied Staffing decreased by $696.0 million, or 37.8%, to $1.1 billion in 2024, driven by a 24.2% decline in professionals on assignment [191]. - Physician Staffing revenue increased by $20.3 million, or 11.4%, to $198.6 million in 2024, primarily due to a 5.8% increase in billable days [193]. Cash Flow and Liquidity - Cash and cash equivalents increased to $81.6 million in 2024, up from $17.1 million in the prior year, with cash flow from operating activities reported at $120.1 million [167]. - Net cash provided by operating activities decreased by $128.4 million to $120.1 million in 2024 compared to $248.5 million in 2023 [200]. - As of December 31, 2024, cash and cash equivalents were reported at $81.6 million, with working capital decreasing by $46.2 million to $214.6 million [196]. Expenses and Cost Management - Direct operating expenses decreased by 31.8% to $1.1 billion in 2024, as a result of revenue declines and tighter bill/pay spreads [176]. - Selling, general and administrative expenses decreased by 22.3% to $233.4 million in 2024, primarily due to reductions in compensation and marketing expenses [177]. - Restructuring costs for 2024 were $4.3 million, primarily related to employee termination and lease exit costs, compared to $2.6 million in 2023 [181]. - Corporate overhead decreased to $68.5 million in 2024 from $71.0 million in 2023, representing 5.1% of consolidated revenue [195]. Tax and Credit Losses - Income tax benefit totaled $1.8 million for 2024, compared to an income tax expense of $30.3 million in 2023, reflecting a decrease in book income primarily due to credit loss expense [188]. - Credit loss expense increased to $21.4 million in 2024, up from $14.6 million in 2023, representing 1.6% of revenue compared to 0.7% in the prior year [178]. - Total allowances for credit losses were $9.3 million as of December 31, 2024, a decrease from $20.5 million in 2023 [222]. Staffing Segments Performance - The Nurse and Allied Staffing segment represented approximately 85% of total revenue, while the Physician Staffing segment accounted for 15% for the year ended December 31, 2024 [165]. - Homecare Staffing grew by 12.4% year-over-year, and the Physician Staffing segment increased by 11.4% over the prior year [166]. - Average revenue per FTE per day in Nurse and Allied Staffing decreased by $84, or 18.2%, to $378 in 2024 [190]. - Total days filled in Physician Staffing increased by 5.8% to 97,888 in 2024, with revenue per day filled at $2,029 [194]. Mergers and Acquisitions - The company entered into a Merger Agreement with Aya Healthcare, with the merger expected to close in the second half of 2025, subject to regulatory approvals [168]. Other Financial Metrics - Interest income for the year ended December 31, 2024, was $2.1 million, a significant increase from an immaterial amount in 2023 [186]. - The company recognized $60.4 million in estimated revenue for services worked but not yet billed as of December 31, 2024, compared to $89.9 million in 2023 [219]. - Deferred tax assets related to federal, state, and foreign NOL carryforwards amounted to $6.6 million as of December 31, 2024 [224]. - The company is subject to an unrecognized tax benefit of $10.1 million as of December 31, 2024, reflecting uncertain tax positions [226]. Risk Management and Currency Exposure - The company has not entered into any foreign currency hedges, with approximately 3% of expenses related to services provided by employees in India [234]. - The company does not believe inflation significantly impacted its operations, actively seeking to adjust billing rates to reflect cost increases [231]. - Fluctuations in exchange rates impact the U.S. dollar amount of stockholders' equity [236]. - Non-U.S. subsidiaries' assets and liabilities are translated into U.S. dollars at the end of the reporting period exchange rate [236]. - Translation adjustments are recorded in stockholders' equity as a component of accumulated other comprehensive loss [236].

Revenue Performance - Fourth quarter revenue was $309.9 million, a decrease of 25% year-over-year and 2% sequentially[6] - Full year revenue for 2024 was $1.34 billion, a decrease of 33% compared to 2023[7] - Revenue from services for the three months ended December 31, 2024, was $309,940, a decrease of 25.1% compared to $414,035 for the same period in 2023[23] - Revenue from services for Q4 2024 was $309,940,000, a decrease of 25% compared to $414,035,000 in Q4 2023[30] - For the year ended December 31, 2024, total revenue from services was $1,344,004,000, a decline of 33% from $2,019,728,000 in 2023[34] Profitability and Loss - Net loss attributable to common stockholders for Q4 2024 was $3.8 million, compared to net income of $9.0 million in the prior year[6] - Net loss attributable to common stockholders for the three months ended December 31, 2024, was $(3,753), compared to a net income of $9,038 for the same period in 2023[25] - The company reported a diluted net loss per share of $(0.12) for the three months ended December 31, 2024, compared to earnings of $0.26 per share for the same period in 2023[25] - The company reported a loss from operations of $3,433,000 in Q4 2024, compared to income of $13,424,000 in Q4 2023[30] Adjusted EBITDA - Adjusted EBITDA for Q4 2024 was $9.3 million, representing 3.0% of revenue, down from 5.0% in the prior year[6] - Adjusted EBITDA for the three months ended December 31, 2024, was $9,271, representing an adjusted EBITDA margin of 3.0%[25] Cash Flow and Liquidity - Cash flows provided by operations for Q4 2024 were $24.2 million, an increase of 101% year-over-year[10] - Cash and cash equivalents increased to $81,633 as of December 31, 2024, compared to $17,094 as of December 31, 2023[27] - Cash and cash equivalents at the end of Q4 2024 were $81,633,000, significantly up from $17,094,000 at the end of Q4 2023[31] - Net cash provided by operating activities for Q4 2024 was $24,234,000, an increase from $12,074,000 in Q4 2023[31] Staffing Revenue - Physician Staffing revenue increased by 13% year-over-year to $53.0 million[9] - Nurse and Allied Staffing revenue was $256.9 million, a decrease of 30% year-over-year[8] - Nurse and Allied Staffing revenue decreased by 30% year-over-year to $256,929,000, while Physician Staffing revenue increased by 13% to $53,011,000[30] - The average revenue per FTE per day for Nurse and Allied Staffing decreased to $363 in Q4 2024 from $414 in Q4 2023[34] Expenses and Liabilities - Total operating expenses for the three months ended December 31, 2024, were $313,373, down from $400,611 in the prior year, reflecting a reduction of 21.8%[23] - Total liabilities decreased to $170,292 as of December 31, 2024, compared to $213,413 as of December 31, 2023, a reduction of 20.2%[27] Shareholder Actions - The company repurchased over 2.4 million shares of common stock for $36.8 million in 2024[4] Merger and Future Outlook - The pending merger with Aya Healthcare is expected to close in the second half of 2025[4] Restructuring Costs - Restructuring costs for the year ended December 31, 2024, were $4,333,000, a 70% increase compared to $2,553,000 in 2023[34]