AMN Healthcare Services (NYSE:AMN) reported second-quarter results above its guidance range, aided by stronger demand in travel nursing, allied staffing and search services, as well as labor disruption-related revenue and several favorable reserve items.
Revenue totaled $673 million, up 2% from a year earlier and 6% above the high end of the company’s outlook. Adjusted EBITDA rose 26% year over year to $73 million, representing 10.9% of revenue, while adjusted earnings per share were $0.77, compared with $0.30 in the prior-year quarter. The company ended the quarter with $362 million in cash and equivalents.
Labor disruption items boosted reported results
Chief Financial Officer and Chief Operating Officer Brian Scott said the company’s second-quarter guidance had assumed $10 million in labor disruption revenue, but reported $25 million. Results also benefited from a billing-accrual true-up related to large first-quarter labor disruption events, a reserve reversal from a prior-year event and other favorable reserve adjustments.
Scott said those items added about $27 million to revenue, 290 basis points to consolidated gross margin and 370 basis points to adjusted EBITDA margin. Excluding those items, revenue would still have been nearly 2% above the high end of guidance, while EBITDA margin would have been at the top of the company’s 6.7% to 7.2% projected range.
Reported gross margin was 30.6%, and second-quarter net income was $21 million, compared with a $116 million net loss a year earlier. Adjusted SG&A expense was $135 million, down 4% from the prior-year period. SG&A included a $5 million unfavorable professional-liability actuarial adjustment, partly offset by a $3 million favorable adjustment to the allowance for credit losses.
Nurse and allied staffing demand accelerated
Revenue in the Nurse and Allied Solutions segment increased 11% year over year to $422 million, with a 28.4% gross margin. Travel nurse volume rose 6%, while allied volume increased 7%, which Grace described as the strongest growth rates for those businesses in four years. International nurse revenue increased 23%.
Grace said travel nurse orders turned positive year over year in May and accelerated in June. As of early August, orders were up about 40% from a year earlier and 20% above August 2024 levels. Allied orders also accelerated through the quarter, reaching mid-teens growth in June and July, according to the company.
AMN attributed its performance to improving demand and higher fill rates, supported by process automation, round-the-clock operations and AI-enabled recruiting. Grace said demand growth has been broad-based across regions, client sizes and service models, including managed service programs, vendor-neutral channels and third-party programs.
For the third quarter, AMN expects Nurse and Allied Solutions revenue to increase 9% to 11% year over year, with travel nurse and allied volumes each expected to grow by more than 10%.
The company said average Nurse and Allied bill rates were nearly flat from a year earlier. Grace said some clients have increased rates for urgent needs, but broader rate increases have not yet emerged. She added that sustained demand, particularly during the winter-order period, could eventually support higher rates.
Search business grew while locums and technology revenue declined
Physician and Leadership Solutions revenue fell 6% year over year to $165 million. However, the search business grew revenue 27%, with physician search new searches rising 37% sequentially and 40% year over year. Executive search new searches increased 30% year over year, and leadership search volume rose 60%.
Locum tenens revenue declined 8% year over year to $131 million. Scott said revenue was flat sequentially, partly due to a $2 million negative sales adjustment that reduced both revenue and gross profit. The company said locums demand is increasingly occurring in competitive vendor-neutral channels and that it is applying process and technology changes to improve fulfillment. Grace said AMN expects locums to return to year-over-year growth in 2027.
Technology and Workforce Solutions revenue decreased 15% year over year to $87 million, or 11% excluding the divestiture of Smart Square. Language services revenue was $70 million, down 8%, as pricing declined 8% while volume was flat. VMS revenue was $15 million, down 20% from a year earlier.
Grace said AMN expects pricing pressure in language services to continue through the rest of 2026, though it anticipates more muted pricing compression in 2027. The company is expanding a lower-cost service tier and globalizing portions of its workforce delivery model to support future margins.
Acquisitions, balance sheet and outlook
AMN completed two small acquisitions during the quarter for a combined $3 million. It acquired Essential Leadership Assessment Solution to expand leadership selection, assessment, coaching and succession-planning capabilities. It also acquired Jade Health, which provides medically qualified language interpretation support and AI-enabled tools for patient intake and discharge communications.
The company repurchased 85,000 shares at an average price of $26.33 during the quarter. Total debt stood at $750 million, and leverage under its credit agreement was 1.5 times. Scott said AMN expects at least $225 million in cash at the end of the third quarter, even after a $20 million interest payment, higher cash taxes and repayment of remaining strike-related client deposits.
For the third quarter, AMN forecast consolidated revenue of $640 million to $655 million, gross margin of 27% to 27.5%, and adjusted EBITDA margin of 6.5% to 7%. The outlook includes approximately $7 million to $8 million of strike-related revenue, Scott said.
About AMN Healthcare Services (NYSE:AMN)
AMN Healthcare Services, Inc (NYSE: AMN) is a leading provider of healthcare workforce solutions in the United States. The company specializes in staffing and recruitment services for a broad range of clinical and allied health professionals, including travel nurses, permanent placement of nursing staff, locum tenens physicians, and allied health personnel. In addition to direct staffing, AMN Healthcare offers comprehensive workforce management solutions such as vendor management systems (VMS), recruitment process outsourcing (RPO), and compliance and credentialing services through its technology platforms.
Founded in 1985 as American Mobile Nurses, the company rebranded to AMN Healthcare in 2010 to reflect its expanding portfolio of services.
