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CROSS COUNTRY HEALTHCARE INC (CCRN)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $293.4M, down 23% year-over-year and 5% sequential; consolidated gross margin held at 20.0% while adjusted EBITDA margin slipped to 2.9% .
  • Against S&P Global consensus, revenue missed ($314.8M est. vs $293.4M actual) and Primary EPS was modestly below ($0.071 est. vs $0.06 actual); management provided no forward guidance and did not host a call due to the pending Aya Healthcare merger, reducing near‑term visibility *.
  • Segment mix: Nurse & Allied revenue fell 27% YoY to $242.3M with lower FTEs and revenue per FTE/day; Physician Staffing grew 9% YoY to $51.1M and improved revenue/day to $2,253 .
  • Strategic narrative emphasized productivity initiatives (AI automation and the India center of excellence) and continued merger execution with Aya/FTC, while maintaining a strong balance sheet ($80.7M cash, no debt) .

What Went Well and What Went Wrong

  • What Went Well

    • Physician Staffing delivered YoY revenue growth (+9%) and improved contribution income, with revenue per day filled rising to $2,253 .
    • Homecare and Cross Country Education reported double-digit sequential revenue growth, supporting non‑travel momentum .
    • Balance sheet resilience: $80.7M cash, no debt, and ABL availability of $133.5M net, providing strategic flexibility .

  • What Went Wrong

    • Topline pressure persisted: consolidated revenue declined 23% YoY and 5% sequential; Nurse & Allied revenue fell 27% YoY with FTEs down to 7,411 and revenue/FTE/day down to $360 .
    • Profitability compressed: adjusted EBITDA fell to $8.6M and margin to 2.9%; adjusted EPS of $0.06 remained below prior year .
    • Investor visibility limited: no earnings call and no forward guidance given in light of the pending Aya Healthcare transaction, constraining estimate anchoring and narrative discovery .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$315.1 $309.9 $293.4
GAAP Diluted EPS ($USD)$0.08 $(0.12) $(0.02)
Adjusted EPS ($USD)$0.12 $0.04 $0.06
Gross Profit ($USD Millions)$64.2 $62.0 $58.7
Gross Profit Margin %20.4% 20.0% 20.0%
Adjusted EBITDA ($USD Millions)$10.3 $9.3 $8.6
Adjusted EBITDA Margin %3.3% 3.0% 2.9%
Q1 2025 Estimates vs ActualConsensus EstimateActual
Revenue ($USD Millions)$314.8*$293.4
Primary EPS ($USD)$0.071*$0.06*

Values retrieved from S&P Global.*

Segment Breakdown

Segment MetricQ3 2024Q4 2024Q1 2025
Nurse & Allied Revenue ($USD Millions)$264.9 $256.9 $242.3
Nurse & Allied Contribution Income ($USD Millions)$19.3 $20.3 $17.2
Physician Staffing Revenue ($USD Millions)$50.3 $53.0 $51.1
Physician Staffing Contribution Income ($USD Millions)$4.6 $3.5 $4.0

KPIs

KPIQ3 2024Q4 2024Q1 2025
Nurse & Allied FTEs7,660 7,621 7,411
Nurse & Allied Revenue per FTE per Day ($)$373 $363 $360
Physician Days Filled24,424 25,427 22,692
Physician Revenue per Day Filled ($)$2,058 $2,085 $2,253

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Company Guidance (overall)Q1 2025N/ANo forward-looking guidance (pending Aya merger) Withdrawn
RevenueQ4 2024$300M–$310M (guided in Q3) Actual $309.9M Achieved high end
Adjusted EBITDAQ4 2024$11M–$13M (guided in Q3) Actual $9.3M Below guide
Adjusted EPSQ4 2024$0.10–$0.14 (guided in Q3) Actual $0.04 Below guide

Earnings Call Themes & Trends

Note: The company did not host a Q1 2025 earnings call .

TopicPrevious Mentions (Q-2 and Q-1)Current PeriodTrend
AI/Technology & ProductivityQ3: macro risk disclosures include AI; operational comments on margin pressure and demand rising . Q4: emphasis on clinical excellence amid competitive market .CEO highlights leveraging AI automation and India center of excellence to drive efficiency and profitability .Increasing focus on automation and efficiency investments .
Core Nurse & Allied MarketQ3: stabilization, demand rising, bill rate stability . Q4: dynamic and competitive market; non-travel strength .Market continues to stabilize; Nurse & Allied metrics still declining YoY .Stabilizing, but volumes/pricing still soft .
Regulatory/TransactionQ4: pending Aya merger; no call/guidance .Continuing to work with Aya and FTC; targeting H2 close .Transaction progress; disclosure-driven communication .
MSP/Commercial MomentumQ3/Q4: three-year MSP renewal .No new MSP news; maintained strong pipeline context via operations .Steady MSP anchor; pipeline execution focus .
Workforce Health Macro—National nursing survey highlights burnout/staffing stress; call to action for leaders .Industry headwinds persist; supports long‑term demand backdrop .
Balance SheetQ3: $64M cash, no debt . Q4: $81.6M cash, no debt .$80.7M cash, no debt; ABL availability strong .Consistently strong liquidity .

Management Commentary

  • “Our first quarter results reflect solid execution… As the market for core nurse and allied continues to stabilize, we remain focused on driving productivity… leveraging our investments in AI automation as well as our cost-effective center of excellence in India to fuel efficiency and improved profitability.” — John A. Martins, President & CEO .
  • “Looking ahead, we continue working with Aya Healthcare and the Federal Trade Commission towards the successful consummation of the merger transaction in the second half of this year.” — John A. Martins .

Q&A Highlights

  • No earnings call or Q&A was held due to the pending Aya Healthcare merger; the company also did not provide forward-looking guidance .

Estimates Context

  • Q1 2025 revenue missed consensus ($314.8M est. vs $293.4M actual), and Primary EPS modestly missed ($0.071 est. vs $0.06 actual), suggesting slight underperformance relative to Street expectations; lack of guidance may prompt further estimate dispersion until merger clarity improves .
    Values retrieved from S&P Global.

Key Takeaways for Investors

  • Revenue and EPS came in below S&P Global consensus; without guidance or a call, near‑term visibility is reduced and the merger timeline dominates the narrative *.
  • Nurse & Allied remains the pressure point (FTEs and revenue/FTE/day down), while Physician Staffing shows healthier fundamentals (YoY revenue growth, improved revenue/day) .
  • Margin stabilization is tenuous: gross margin held flat sequentially, but adjusted EBITDA margin compressed; continued productivity initiatives (AI/India COE) are central to margin recovery .
  • Liquidity is a strength ($80.7M cash, no debt; ample ABL availability), providing flexibility through the transaction and cyclical trough .
  • The Aya merger is the primary catalyst; continued FTC process updates and closing timing will likely drive stock reaction near term .
  • Industry survey underscores persistent nurse burnout and staffing shortages, supporting a structurally supportive demand backdrop for staffing solutions over the medium term .
  • For positioning: favor exposure to Physician Staffing momentum and efficiency gains; monitor Nurse & Allied volume trends and any signs of bill rate firming as core drivers of earnings recovery .
Notes:
* Values retrieved from S&P Global.