The sharp drop in operating cash flow in Q4 2023 was primarily driven by a significant decline in net income—from **$53,174 thousand** in Q4 2022 to **$12,489 thousand** in Q4 2023—stemming from lower revenue and operating outcomes in key segments such as Nurse and Allied Solutions.  **[0000950142-24-000460_eh240448596_ex9901.htm:1]** **[0000950142-24-000460_eh240448596_ex9901.htm:8]**  Additionally, the decrease was compounded by a **$183,517 thousand** reduction in accounts payable and accrued expenses and a **$80,135 thousand** drop in accrued compensation and benefits.  **[0001142750-24-000016_amn-20231231.htm:69]**  Increased prepaid expenses, other current assets, and a higher Days Sales Outstanding (rising from **55 days** to **70 days**) further contributed to the decline.  **[0001142750-24-000016_amn-20231231.htm:69]** **[0001142750-24-000016_amn-20231231.htm:53]** 

What drove the sharp drop in operating cash flow in Q4 2023?

The notably lower annual operating cash flow in FY 2023, at **$372.2 million** compared to **$653.7 million** in FY 2022, is mainly due to several factors. These include a drop in net income excluding non-cash expenses by **$232.0 million**, reductions in accounts payable and accrued expenses by **$232.3 million**, and lower accrued compensation and benefits by **$69.6 million**. These declines were partly offset by decreases in accounts receivable and subcontractor receivables as well as increases in other liabilities, but overall, the net effect led to the significant decline in net cash provided by operating activities in FY 2023.  **[0001142750-24-000016_amn-20231231.htm:53]** 

Why is the annual operating cash flow notably lower in FY 2023 compared to FY 2022?

The decline in operating cash flow in Q3 2024 was primarily driven by a **decrease in net income excluding non-cash expenses** (a drop of **$186.9 million**), a **reduction in other liabilities** (a decrease of **$62.8 million** due to changes in income taxes payable and accrued loss contingencies), an **increase in income taxes receivable** (up by **$12.5 million**), and a **reduction in accounts payable and accrued expenses** (a decline of **$9.0 million** mainly due to the payment of a legal settlement).  **[0001142750-24-000061_amn-20240930.htm:30]** 

What factors contributed to the decline in operating cash flow in Q3 2024?

198d09e60de19799640e5ab071f4efc5dfa9fd4ee07292fc8f6667a106e3513e

AMN's significant revenue drop in FY 2023 was mainly driven by several factors. **First**, the company experienced a **cyclical reset in staffing demand**, which markedly reduced business activity.  **[0000950142-24-000460_eh240448596_ex9901.htm:1]**  **Second**, there was a substantial decrease in the **Nurse and Allied Solutions segment**, largely due to a pronounced decline in **travel nurse staffing revenue**.  **[0001142750-24-000016_amn-20231231.htm:81]** **[0001142750-24-000016_amn-20231231.htm:46]**  **Additionally**, the decline was compounded by a sharp reduction in revenue from **Labor Disruption Services** and a drop in the **Technology and Workforce Solutions segment**. These combined factors led to the overall decrease in revenue for FY 2023.  **[0000950142-24-000460_eh240448596_ex9901.htm:1]** **[0001142750-24-000016_amn-20231231.htm:81]** **[0001142750-24-000016_amn-20231231.htm:46]** 

What factors contributed to the significant revenue drop in FY 2023?

In Q4 2023, **Income from operations** was significantly lower at **$34,170 thousand** due to several key factors. The company experienced a **27% decline in consolidated revenue** driven by lower bill rates, reduced volume, and fewer hours worked, especially in the **Nurse and Allied Solutions segment**, which alone saw a **35% revenue decline**. This led to lower gross margins because of reduced bill-pay spreads. Additionally, the **Technology and Workforce Solutions segment** suffered from a revenue mix shift and a notable drop in its gross margin—from **73.3% in Q4 2022 to 60.5% in Q4 2023**—partly due to decreased Vendor Management System revenue. Furthermore, **SG&A expenses increased to $185 million**, making up **22.7% of revenue** compared to **19.5%** in the previous year, driven by costs associated with acquisitions and integration efforts related to MSDR. Collectively, these factors resulted in the considerably lower income from operations in Q4 2023.  **[0000950142-24-000460_eh240448596_ex9901.htm:1]** **[AMN_3373704_4]** **[AMN_3373704_5]** 

Why was Income from operations so low in Q4 2023?

The sharp decline in Q4 2023 net income was driven by a combination of factors. There was a **27% decrease in consolidated revenue**—with the Nurse and Allied Solutions segment experiencing a **35% revenue decline**—which put significant pressure on earnings. This revenue drop was compounded by **gross margin compression**, as margins fell from **33.3% to 31.9%**, partly due to lower bill-pay spreads and an unfavorable revenue mix shift. Additionally, **SG&A expenses increased** from **19.5% to 22.7% of revenue**, further impacting profitability, while lower operating leverage led to a decline in operating margin from **10.2%** in Q4 2022 to **4.2%** in Q4 2023. Significant one-time costs of **$24,124 thousand** related to acquisition and integration, along with a cyclical market reset in the healthcare staffing space, also contributed to the decline.  **[0000950142-24-000460_eh240448596_ex9901.htm:1]** **[AMN_3373704_4]** **[0000950142-24-000460_eh240448596_ex9901.htm:10]** **[0000950142-24-000460_eh240448596_ex9901.htm:8]** 

What drove the sharp decline in Net income in Q4 2023?

The dramatic drop in Basic EPS in **Q4 2023** was driven by multiple factors. The company experienced a **27% decline in revenue** compared to Q4 2022, which was largely due to lower bill rates, volume, and hours worked—especially a **35% year-over-year decline** in the Nurse and Allied Solutions segment.  **[0000950142-24-000460_eh240448596_ex9901.htm:1]** **[AMN_3373704_4]**  Additionally, the **gross margin decreased by 140 basis points** as lower bill-pay spreads and an unfavorable revenue mix in Technology and Workforce Solutions further pressured profitability.  **[AMN_3373704_4]**  Reduced operating leverage—evidenced by a **40% decrease in adjusted EBITDA** and a **280 basis points drop** in its EBITDA margin—also negatively impacted the net income per share.  **[0000950142-24-000460_eh240448596_ex9901.htm:1]** **[AMN_3373704_5]**  Furthermore, higher SG&A expenses, rising to **22.7% of revenue** from **19.5% the previous year**, due to acquisition and integration costs related to the MSDR acquisition, added to the decline.  **[AMN_3373704_4]**  Finally, an industry-wide cyclical reset, which particularly affected the Travel Nurse segment with a **40% decrease in revenue**, compounded the negative effects on Basic EPS.  **[0000950142-24-000460_eh240448596_ex9901.htm:1]** **[AMN_3373704_4]** 

Why did Basic EPS drop dramatically in Q4 2023?

The further drop in Basic EPS in Q3 2024 was driven by multiple factors. **EPS fell to $0.18** due to an **87% decrease in net income** (from **$53 million** in Q3 2023 to **$7 million** in Q3 2024), a **19% decline in revenue** (from **$849.4 million** to **$688 million**), a **30% decrease in the Nurse and Allied Solutions segment**, and a **290 basis point drop in consolidated gross margin**. These factors collectively led to the significant decline in Basic EPS in Q3 2024.  **[0001142750-24-000061_amn-20240930.htm:10]** **[0000950142-24-002692_eh240554258_ex9901.htm:1]** 

What led to the further drop in Basic EPS in Q3 2024?

0484b3d1773e89b031e64dd702632c4fce16787f18f077fbe3677beab2828550

The increase in Cash and cash equivalents in Q1 2024 was driven by **strong cash flow from operations** of **$81,386 thousand**, along with **lower cash used in investing activities** (net outflow of **$(21,399) thousand**) and **cash used in financing activities** (net outflow of **$(38,973) thousand**), which collectively resulted in a net increase of **$21,014 thousand** in cash during the quarter.  **[0000950142-24-001321_eh240479343_ex9901.htm:1]** **[0000950142-24-001321_eh240479343_ex9901.htm:8]** 

What drove the increase in Cash and cash equivalents in Q1 2024?

AMN Healthcare’s total assets declined in Q3 2024 primarily due to significant decreases in key asset categories. **Accounts receivable (net)** dropped from **$623,488 thousand** at the end of FY 2023 to **$451,062 thousand** in Q3 2024—a reduction of **$172,426 thousand**—and **subcontractor accounts receivable** fell by **$49,137 thousand**. In addition, **intangible assets (net)** decreased from **$474,134 thousand** to **$402,400 thousand** (a decline of **$71,734 thousand**), likely due to amortization, and there was a slight reduction in **cash and cash equivalents** by **$2,385 thousand**. These factors combined to result in an overall decline of **$256,578 thousand** in total assets.  **[0000950142-24-002692_eh240554258_ex9901.htm:9]** **[0001142750-24-000061_amn-20240930.htm:1]** 

Why did Total assets decline in Q3 2024?

AMN Healthcare’s significant increase in its revolving credit facility in Q4 2023 was influenced by several factors. The facility balance surged from **$95,000** at the end of September 2023 to **$460,000** by December 2023 due to enhanced financing activities during the quarter, which included **proceeds of $815,000** and **payments of $355,000** that were part of overall liquidity management measures.  **[0000950142-24-000460_eh240448596_ex9901.htm:9]** **[0001142750-24-000016_amn-20231231.htm:70]**  Additionally, the company’s need for liquidity to support initiatives such as the acquisition of MSDR in November 2023—which helped boost its locum tenens revenue growth—played a role.  **[AMN_3373704_4]**  The spike was also supported by an amended credit agreement executed in February 2023, which raised the borrowing limit from **$400 million to $750 million**, thereby providing more capacity for its financing strategies.  **[0001142750-24-000016_amn-20231231.htm:54]** **[0001142750-24-000016_amn-20231231.htm:93]** 

What factors contributed to the spike in the Revolving credit facility in Q4 2023?

5865db25e64a9c759abaa4f5181444e2978fbc8326524f74d52358ff028631ad

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Average travelers on assignment for nurse and allied solutions (percentage change (year-over-year))

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844a721e12faedf0873897c9f1b5a2f7449b2042ff5b2e8e9632118473626831

AMN HEALTHCARE SERVICES (AMN)

Financials