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CROSS COUNTRY HEALTHCARE INC (CCRN)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 missed Street on both revenue and adjusted EPS: revenue $274.1M vs $292.2M consensus, and adjusted EPS -$0.01 vs $0.063 expected; GAAP diluted EPS was -$0.20 . Consensus figures from S&P Global.*
  • Sequential softness in core Travel Nurse & Allied continued (segment -7% q/q), partly offset by resilient Physician Staffing (+3% y/y) and strong Homecare growth (>30% y/y); gross margin improved 40 bps q/q to 20.4% .
  • Cost discipline progressed (SG&A -5% q/q) leveraging the India center of excellence; adjusted EBITDA margin was 2.8% (down 10 bps q/q) amid volume normalization .
  • No guidance and no earnings call due to the pending Aya Healthcare merger; management “expects” close in Q4 2025—key stock catalyst alongside estimate resets after the miss .

What Went Well and What Went Wrong

  • What Went Well

    • Homecare momentum: “Strong performance in Homecare Staffing, with revenue growing more than 30% over the prior year” .
    • Physician Staffing held up: revenue +3% y/y with contribution income up 13% y/y; revenue/day filled up to $2,239 vs $1,992 y/y .
    • Cost actions gaining traction: “5% sequential decline in SG&A fueled by further leverage of our low-cost center of excellence in India” . CEO: “results were in line with expectation… momentum in our Homecare and Physician Staffing businesses… efforts to control costs” .

  • What Went Wrong

    • Top-line underperformed: revenue fell 7% q/q and 19% y/y, missing consensus ($274.1M vs $292.2M), reflecting continued normalization in core Travel Nurse & Allied . Consensus from S&P Global.*
    • Profitability pressure: adjusted EBITDA fell to $7.6M (2.8% margin), down 12% q/q and 46% y/y; adjusted EPS slid to -$0.01 vs $0.06 in Q1 and $0.10 in Q2’24 .
    • No guidance, no call: reduced transparency amid merger process; limits near‑term visibility and complicates modeling .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($M)$339.8 $293.4 $274.1
GAAP Diluted EPS ($)-$0.47 -$0.02 -$0.20
Adjusted EPS ($)$0.10 $0.06 -$0.01
Gross Profit Margin (%)20.8% 20.0% 20.4%
Adjusted EBITDA ($M)$14.2 $8.6 $7.6
Adjusted EBITDA Margin (%)4.2% 2.9% 2.8%
Segment Revenue ($M)Q2 2024Q1 2025Q2 2025
Nurse & Allied$291.5 $242.3 $224.3
Physician Staffing$48.3 $51.1 $49.8
Total$339.8 $293.4 $274.1
Segment Contribution Income ($M)Q2 2024Q1 2025Q2 2025
Nurse & Allied$5.8 $17.2 $13.9
Physician Staffing$4.0 $4.0 $4.6
Total (before corporate/DA/res/other)$9.9 $21.3 $18.5
KPIsQ2 2024Q1 2025Q2 2025
Nurse & Allied FTEs8,415 7,411 7,035
Rev per FTE per day ($)$377 $360 $348
Physician Days Filled24,252 22,692 22,228
Physician Rev/Day Filled ($)$1,992 $2,253 $2,239

Additional items: Operating cash flow $4.2M (vs $5.7M in Q1’25), cash $81.2M, no debt; ABL availability $125.7M net of LCs .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Company guidance (revenue, margins, EPS)Q3/Q4 2025No guidance due to pending Aya merger (in place since Q4 2024) No guidance; no earnings call Maintained suspension
Transaction timing (Aya merger)Close timing“Second half of 2025” (prior commentary) “Expect… close in the fourth quarter” Narrowed window

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Travel Nurse & Allied normalizationQ4: dynamic/competitive market; Nurse & Allied -30% y/y, -3% q/q . Q1: “market for core nurse and allied continues to stabilize” .“Core travel nurse and allied continues to normalize amidst steady pricing backdrop” .Stabilizing, volumes drifting lower
Homecare growthQ4: non-travel (Homecare) strength . Q1: double-digit y/y and q/q growth .“Homecare… revenue growing more than 30% over the prior year” .Strengthening
Physician Staffing resilienceQ4: +13% y/y, +5% q/q . Q1: +9% y/y; solid revenue/day .+3% y/y; favorable mix/price; revenue/day $2,239 .Stable to modestly positive
Cost actions/India CoEQ1: driving productivity via AI automation and India CoE .SG&A -5% q/q via India CoE leverage .Ongoing efficiency
Guidance/IR cadenceQ4: no call/guidance (pending Aya) . Q1: same .No call/guidance .Unchanged
Legal/credit loss context2024: large credit loss tied to a customer bankruptcy (y/y comp headwind) .No similar event cited in Q2; footnotes reference 2024 impact .Normalized comps

Management Commentary

  • CEO (John A. Martins): “Our second quarter results were in line with expectation, reflecting a combination of the momentum in our Homecare and Physician Staffing businesses, as well as our continuing efforts to control costs.” He added, “We expect that the pending merger transaction with Aya will close in the fourth quarter.”
  • On operating discipline: “5% sequential decline in SG&A fueled by further leverage of our low-cost center of excellence in India.”
  • Capital/liquidity posture: “$81 million of cash on-hand and no debt as of June 30, 2025.”

Q&A Highlights

  • The company did not host an earnings call or Q&A session due to the pending Aya merger; no additional clarifications were provided beyond the press release .

Estimates Context

MetricConsensus (S&P Global)Actual
Revenue ($M)$292.2*$274.1
Adjusted/Primary EPS ($)$0.063*-$0.01
  • Result: Both revenue and adjusted EPS missed consensus; the magnitude of the revenue shortfall ($18M) and EPS shortfall ($0.07) may prompt near-term estimate revisions downward given continued normalization in core travel nurse/allied volumes and the absence of guidance . Consensus values retrieved from S&P Global.*

Key Takeaways for Investors

  • Volume normalization in core Travel Nurse & Allied persists; without a near-term inflection, top-line pressure likely remains a headwind even as pricing appears steady .
  • Mix supports resilience: Physician Staffing and Homecare are relative bright spots (Homecare >30% y/y growth; Physician +3% y/y), partially offsetting declines in Travel Nurse & Allied .
  • Margin dynamics: gross margin expanded 40 bps q/q, but adjusted EBITDA margin slipped 10 bps to 2.8% as lower volumes compressed profitability .
  • Execution on costs continues (SG&A -5% q/q via India CoE), but deeper volume pressure could overwhelm cost saves absent a demand recovery .
  • Balance sheet remains a buffer (cash $81.2M, no debt), with ample liquidity under the ABL, limiting financial risk as the merger process continues .
  • Near-term trading: the miss vs consensus and lack of guidance are negative catalysts; the Aya closing timeline update to “Q4 2025” is the primary potential positive catalyst .
  • Medium-term: strategic combination with Aya could reshape growth/scale; until close, investors should monitor Travel Nurse & Allied volume trends, Homecare momentum, and any regulatory milestones on the transaction .

Other Q2 2025 Press Releases

  • TeleSpecialists announced its ninth consecutive ISO 9001:2015 certification, highlighting continued commitment to quality management and AI‑enhanced digital healthcare solutions; relevance is indirect but supportive of broader healthcare services quality narratives .

Footnote: *Values retrieved from S&P Global.