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    AMN Healthcare Services Inc (AMN)

    Q1 2024 Earnings Summary

    Reported on Jan 22, 2025 (After Market Close)
    Pre-Earnings Price$60.85Last close (May 9, 2024)
    Post-Earnings Price$56.43Open (May 10, 2024)
    Price Change
    $-4.42(-7.26%)

    What went well

    • 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.

    What went wrong

    • 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.

    Q&A Summary

    1. 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.

    2. 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.

    3. 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.

    4. 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.

    5. 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.

    6. 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.

    7. 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.

    8. 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.

    9. 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.

    10. 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.

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