AMN HEALTHCARE SERVICES INC (AMN) Q4 2024 Earnings Summary

Executive Summary

Q4 delivered a top-line and profitability beat versus guidance: revenue $734.7M (+6.9% q/q, -10% y/y) and adjusted EBITDA $75.1M, both above the high end of guidance; GAAP EPS was a loss of ($4.90) driven by a $222M non‑cash goodwill impairment, while adjusted EPS was $0.75 .
Beat was aided by $62M of labor disruption revenue (~$22M above guidance) and better-than-expected core Nurse & Allied and Technology & Workforce Solutions results; language services grew 12% y/y, while VMS fell 26% y/y .
Q1’25 outlook implies sequential moderation as strike tailwinds fade: revenue $660–$680M, GM 28.1–28.6%, adj. EBITDA margin 7.7–8.2%; guidance embeds ~$24M of labor disruption revenue and segment y/y declines (Nurse & Allied down 22–25%, P&L down 9–11%, TWS down 8–10%) .
Balance sheet/cash flow constructive: Q4 operating cash flow $73M; revolver reduced $75M in Q4 and $250M for FY’24; year-end net leverage 3.0x .
Stock reaction catalyst: narrative pivot toward stabilization plus tech-led execution (ShiftWise Flex rollout largely complete, Passport AI matching, WorkWise platform) may support sentiment, but goodwill impairment and lower Q1 margin starting point (~8%) temper near-term earnings power .

What Went Well and What Went Wrong

What Went Well
- Revenue and profitability beat: “Fourth quarter revenue of $735 million was $30 million above the high end of our guidance range. And adjusted EBITDA of $75 million also exceeded expectations.” – CEO Cary Grace .
- Labor disruption upside and core execution: $62M labor disruption revenue (+$22M vs guidance); ex-labor disruption, Nurse & Allied and TWS topped the high end of guidance .
- Technology progress driving client receptivity: ShiftWise Flex VMS migrations substantially complete; Passport app adds AI-enabled auto-apply; WorkWise integrates forecasting, scheduling, and workforce management .
What Went Wrong
- Non-cash goodwill impairment ($222M) drove GAAP loss and negative operating margin (reported operating margin -27.6%) .
- Margin pressure continued: consolidated GM 29.8% (-210 bps y/y, -120 bps q/q), with Nurse & Allied GM 23.8% (-170 bps y/y, -120 bps q/q) amid international nurse headwinds and mix .
- VMS weakness within TWS: VMS revenue $23M (-26% y/y, -10% q/q), weighing on segment mix and GM; management expects Q1’25 VMS “a little under $20M” as a low-water mark before new wins ramp .

Financial Results

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$740.7	$687.5	$734.7
GAAP Diluted EPS ($)	$0.42	$0.18	($4.90)
Adjusted Diluted EPS ($)	$0.98	$0.61	$0.75
Gross Margin %	31.0%	31.0%	29.8%
Adjusted EBITDA ($USD Millions)	$94.1	$73.9	$75.1
Adjusted EBITDA Margin %	12.7%	10.7%	10.2%

Segment revenue

Segment Revenue ($USD Millions)	Q2 2024	Q3 2024	Q4 2024
Nurse & Allied Solutions	$442.4	$399.4	$454.7
Physician & Leadership Solutions	$186.1	$180.6	$173.1
Technology & Workforce Solutions	$112.2	$107.5	$106.9

Segment gross margin

Segment Gross Margin %	Q2 2024	Q3 2024	Q4 2024
Nurse & Allied Solutions	23.8%	25.0%	23.8%
Physician & Leadership Solutions	30.5%	28.3%	28.5%
Technology & Workforce Solutions	60.2%	57.9%	57.3%

KPIs

KPI	Q2 2024	Q3 2024	Q4 2024
Avg. travelers on assignment (Nurse & Allied)	10,302	9,176	9,206
Locum tenens days filled	56,244	55,315	51,641
Locum revenue per day filled ($)	$2,538	$2,562	$2,646

Additional Q4 details: Labor disruption revenue $62M; Travel Nurse revenue $230M (-35% y/y, -6% q/q); Allied revenue $149M (-9% y/y, +6% q/q); Locums revenue $137M (+10% y/y, -4% q/q); Language services $76M (+12% y/y, +2% q/q); VMS $23M (-26% y/y, -10% q/q) .

Guidance Changes

Q4 2024 outcome vs prior guidance (issued 11/7/24)

Metric	Period	Previous Guidance	Current Guidance	Change
Consolidated Revenue	Q4 2024	$685–$705M	Actual: $734.7M	Beat
Gross Margin	Q4 2024	29.3%–29.8%	Actual: 29.8%	At/Above High End
SG&A as % of Revenue	Q4 2024	21.5%–22.0%	Actual: 21.6%	In Range
Operating Margin	Q4 2024	1.8%–2.5%	Actual: -27.6% (impairment)	Miss (GAAP, impairment)
Adjusted EBITDA Margin	Q4 2024	9.2%–9.7%	Actual: 10.2%	Beat
Notes	Q4 2024	Outlook included ~$45M revenue not expected to recur, +~60 bps GM impact	n/a	n/a

Q1 2025 guidance (first issuance this quarter)

Metric	Period	Previous Guidance	Current Guidance	Change
Consolidated Revenue	Q1 2025	n/a	$660–$680M	New
Gross Margin	Q1 2025	n/a	28.1%–28.6%	New
SG&A as % of Revenue	Q1 2025	n/a	22.2%–22.7%	New
Operating Margin	Q1 2025	n/a	-0.3% to 0.4%	New
Adjusted EBITDA Margin	Q1 2025	n/a	7.7%–8.2%	New
Labor Disruption Revenue (assumption)	Q1 2025	n/a	~$24M	New
Segment y/y outlook	Q1 2025	n/a	Nurse & Allied: -22% to -25%; P&L: -9% to -11%; TWS: -8% to -10%	New
D&A (excl. cost of services)	Q1 2025	n/a	~$19M	New
Depreciation in cost of services	Q1 2025	n/a	~$2M	New
Non-cash Amortization	Q1 2025	n/a	~$20M	New
Stock-based Compensation	Q1 2025	n/a	~$9M	New
Interest Expense	Q1 2025	n/a	~$12M	New
Integration & Other	Q1 2025	n/a	~$3M	New
Adjusted Tax Rate	Q1 2025	n/a	~26%	New
Diluted Shares	Q1 2025	n/a	~38.4M	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024, Q3 2024)	Current Period (Q4 2024)	Trend
Technology platforms (ShiftWise Flex, Passport, WorkWise)	Q2: Flex rollout >50% of VMS spend; strong VMS pipeline; TWS 41% of segment operating income; language services +18% y/y . Q3: Pipeline improving; adding locums functionality to Flex .	Flex migrated “almost all” ShiftWise users; Passport adds AI auto-apply (now supports locums); WorkWise integrating forecasting/scheduling; used in labor disruptions .	Advancing; broader adoption
Demand normalization (nurse orders, seasonality)	Q2: Largest clients still reducing contingent labor but signs of improvement in travel nurse market . Q3: Seasonality; cautious backdrop .	Nurse orders above Apr’24 levels, seasonal drop less severe vs prior 2 yrs; allied new orders +20% y/y; locums demand up 6% q/q; client behavior moving toward cost-effective flexibility .	Stabilizing
Margins (staffing GM pressure)	Q2: GM down y/y on lower Nurse & Allied margin and mix . Q3: GM 31.0% (flat q/q), pressure across segments .	GM 29.8%, decline tied to lower margins in all segments; Nurse & Allied GM 23.8%. Q&A: Q1 Nurse & Allied GM to be similar to Q4 after adjusting for reserve; bill rates stable to modestly up .	Bottoming/stabilizing
International nurse retrogression	—	Identified as headwind: ~$(100)M revenue headwind across 2024–2025, ~60% in 2024; remaining in 1H’25; expect flattening in 2H’25; growth resumes 2026 .	Headwind fades into 2H’25
VMS/outsourced solutions	Q2: VMS revenue $28M (-41% y/y) . Q3: VMS $25M (-34% y/y) .	VMS $23M (-26% y/y); Q1’25 “a little under $20M” low mark; new Flex wins to backfill .	Near-term trough, rebuild in ’25
Locums	Q2: +17% y/y (MSDR impact) . Q3: +26% y/y; -1% q/q .	+10% y/y; -4% q/q; bookings strong; expect flat-to-slightly up Q1 and growth into Q2+ .	Sustained growth driver
Language services	Q2: +18% y/y to $75M . Q3: +13% y/y to $75M .	+12% y/y to $76M; record minutes; expected to continue growing in Q1 .	Consistent growth
Free cash flow conversion	—	Target conversion “in the 60s” with CapEx adjusted to environment .	Solid conversion expectation
Corporate/leadership	CFO transition announced Oct. 2024; Brian Scott rejoining as CFO/COO .	Brian Scott on call; emphasizes automation, speed, unified go-to-market, and efficiency .	Execution focus

Management Commentary

“AMN recorded a solid fourth quarter that outperformed our expectations, and we continue to see a more normalized operating environment compared with the past two years.” – Cary Grace, CEO .
“By the end of the year, we had successfully rolled out our next-generation VMS, ShiftWise Flex, to almost all our ShiftWise users… Passport now enables clinicians to store their preferences and enabled by AI automatically apply for matching opportunities… And we have raised the bar higher with WorkWise” .
“Fourth quarter consolidated revenue was $735 million, above the high end of guidance and consensus… The Nurse and Allied average bill rate was down 6% y/y and was flat sequentially.” – Brian Scott, CFO/COO .
“Healthcare organizations managed wage pressures last year by reducing average hours worked… average hours for travelers also are at a 12-year low, which is negatively impacting the staffing industry's gross margin.” – Cary Grace .

Q&A Highlights

Nurse & Allied gross margin trajectory: Q4 margin (23.8%) included sales reserve reversal; ex‑that, ~22.5%. Q1 expected roughly similar to Q4; bill rates stable to modestly up .
Demand normalization and 2025 setup: ex‑strike and reserve effects, Q1 revenue midpoint down ~$15–$20M sequentially; strong locums bookings; language services to grow; international still a headwind in 1H’25 .
International nurse retrogression: ~$100M revenue headwind across 2024–2025 (~60% in 2024); remainder mostly in 1H’25; flattening in 2H’25 and growth in 2026 .
VMS outlook: Q1’25 VMS “a little under $20M” viewed as low watermark; Flex wins to rebuild through 2025 .
Strike revenue margin: not materially different from base business margins at the gross margin level; EBITDA outperformance in Q4 driven mostly by strike revenue plus VMS and interim upside .
Free cash flow: model “in the 60s” percent conversion range; 2025 CapEx planned $40–$50M; non‑GAAP tax 26–28% .

Estimates Context

S&P Global consensus data for Q4 2024 (revenue, EPS) was unavailable due to a temporary SPGI request limit; therefore, numeric consensus comparisons are not presented here. However, management stated Q4 revenue was “above the high end of guidance and consensus” on the call .
Where estimates may adjust: (i) Q1’25 revenue/margin guide (lower margins vs Q4) and (ii) ongoing VMS trough and international headwinds in 1H’25 likely keep near-term EPS paths conservative; (iii) stabilization in bill rates and improving locums/language trends could support 2H’25 upward revisions if demand follows through .

Key Takeaways for Investors

Beat vs guidance driven by strike revenue and better core execution; adjusted profitability metrics improved sequentially despite continued GM pressure .
GAAP optics noisy due to $222M non‑cash goodwill impairment; focus on adjusted EPS/EBITDA and cash flow (Q4 OCF $73M, FY OCF $320M) .
Near-term setup: Q1’25 guide embeds a step down in revenue/margins as strike tailwind fades and international headwinds persist; margin starting point ~8% suggests H1’25 caution .
Medium-term drivers: technology-led differentiation (Flex, Passport with AI, WorkWise) and locums/language growth position AMN for mix improvement and operating leverage as demand normalizes .
Watch VMS inflection: management sees Q1 as low point for VMS revenue before new Flex wins contribute; confirmed stabilization could be a positive catalyst .
International nurse retrogression is the key known headwind and should ease into 2H’25; visibility improves if priority dates advance and pipeline converts .
Balance sheet improving with deleveraging; continued cash generation and moderated CapEx ($40–$50M FY’25) support flexibility through normalization .

Supporting Detail: Additional Relevant Q4 Press Releases

CFO/COO appointment: Brian Scott appointed CFO & COO effective Nov. 21, 2024 (returning AMN veteran), reinforcing a focus on operational excellence and scaled automation .