Q1 2024 Earnings Summary
- AMN's Schools business grew assignment headcount by 20% year-over-year in Q1 2024, and this growth is expected to continue, with teletherapy growing faster than 20%.
- AMN is making significant progress in technology modernization, including the rollout of ShiftWise Flex, a new generation of their VMS, which has been 40% completed and is expected to be majority completed by the end of the year. They have also reduced order-to-fill time by half, leading to increased clinician and client satisfaction.
- AMN is reengaging with clients and expects to retake market share in Travel Nurse staffing, seeing early signs of success, with almost half of their sales pipeline in vendor-neutral opportunities. They expect these early success signs to continue throughout the year and into 2025.
- Declining volumes in the Nurse and Allied segment: The company projects volume within the Nurse and Allied segment to be down in the low double-digit range in Q2 compared to Q1, indicating a significant decrease in demand.
- Continued pressure on gross margins due to various factors: The company is experiencing pressure on gross margins in the Nurse and Allied segment due to higher housing and travel expenses, a mix shift away from international nurses because of visa limitations, and reductions in hours worked, particularly within Allied.
- Ongoing decline in international nurse staffing with no near-term improvement expected: International nurse staffing revenue is expected to continue declining each quarter throughout 2024 due to visa retrogression, with no change anticipated for the remainder of the year or in 2025.
-
Travel Nurse Demand Bottom
Q: When will Travel Nurse demand bottom and impact revenues?
A: Management expects June to be the low point for travelers on assignment within Nurse and Allied, projecting about a 10% decline from the second quarter average. This downward trajectory is expected to carry into the third quarter. -
Revenue Guidance: Bill Rates and Volumes
Q: What are expectations for bill rates and volumes affecting revenue?
A: For the Nurse and Allied segment, bill rates are expected to decline in the low single digits compared to Q1. Volume is projected to decrease in the low double-digit range quarter-over-quarter. -
Allied Segment Outlook
Q: When will the Allied segment show year-over-year growth?
A: Year-over-year comparisons for Allied are expected to improve in the back half of the year but likely into 2025 before seeing actual growth. -
International Nurse Staffing Impact
Q: How are visa limits affecting international nurse staffing?
A: Visa retrogression is causing declines in the international nurse staffing business, with no change expected for the remainder of the year. Quarter-over-quarter declines are anticipated, with the fourth quarter being the low point. -
Competitive Environment and Market Share
Q: Can AMN retake market share in Travel Nurse staffing?
A: Management believes they can retake share by expanding partnerships and targeting the entire market. Early signs of success include a sales pipeline where almost half is vendor-neutral , positioning the company well as demand returns. -
Locum Tenens Business and MSDR Acquisition
Q: How is the MSDR acquisition impacting the Locum Tenens business?
A: The integration of MSDR has gone well, and they are starting order sharing with AMN. Although revenue growth during integration was below expectations, the core locums business was up 1% year-over-year, with expectations of sequential growth moving into Q2. -
Technology Modernization Efforts
Q: What progress has been made in technology modernization?
A: Significant advancements include the rollout of ShiftWise Flex, a new generation VMS, with almost 40% completion based on spend under management. Automation efforts have reduced time to fill by half, improving satisfaction and internal capture rates. -
Supply Trends and New Recruits
Q: How is the supply of travel nurses trending?
A: New applications remain above pre-pandemic levels. A core group of nurses continues to show strong interest in travel roles, driven by lifestyle and well-being rather than just pay. -
Education Segment Growth
Q: How is the education segment performing?
A: The education business was up 20% year-over-year in the first quarter, with expectations for this growth to continue. Growth is coming from both on-site clinicians and faster growth in teletherapy. -
Interim Management Improvement
Q: Why is interim management improving now?
A: Clients are returning to ensure they are staffed from a leadership standpoint after cost management impacted these businesses. Despite being down 25% year-over-year, the business saw stabilization in price and volume—the first since the second half of '22.