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CROSS COUNTRY HEALTHCARE INC (CCRN)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $309.9M, down 25% y/y and 2% q/q; gross margin compressed to 20.0% and GAAP diluted EPS was -$0.12, while adjusted EPS was $0.04 .
  • Results skewed toward non-travel businesses: Physician Staffing grew 13% y/y and 5% q/q; Education and Homecare noted as strong contributors; Nurse & Allied remained pressured on FTEs and pricing .
  • The company did not host an earnings call and suspended forward guidance due to the pending Aya Healthcare acquisition expected in the second half of 2025, keeping the transaction timeline the primary stock catalyst alongside regulatory/closing milestones .
  • Versus prior Q3 guidance, Q4 revenue landed at the high end ($309.9M vs $300–$310M), but adjusted EBITDA ($9.3M) and adjusted EPS ($0.04) came in below guided ranges ($11–$13M and $0.10–$0.14), reflecting margin pressure and non-GAAP adjustments .

What Went Well and What Went Wrong

What Went Well

  • Non-travel momentum: “continued strength in our non-travel businesses such as Physician Staffing, Education and Homecare,” with Physician Staffing revenue up 13% y/y and 5% q/q; Education delivered double-digit sequential revenue growth .
  • Revenue delivered at high end of range; secured a three-year renewal with the largest MSP customer, reinforcing enterprise relationships .
  • Balance sheet strength: $81.6M cash and no debt at 12/31/24; improved operating cash flow to $24.2M in Q4 and an 11-day y/y improvement in DSO .

What Went Wrong

  • Margin compression: consolidated gross margin fell 190 bps y/y and 40 bps q/q to 20.0%; adjusted EBITDA margin declined to 3.0% (down 200 bps y/y and 30 bps q/q) .
  • GAAP profitability deteriorated: net loss of $3.8M (vs $9.0M income in Q4’23 and $2.6M income in Q3’24); diluted EPS -$0.12 (vs $0.26 y/y and $0.08 q/q) .
  • Non-GAAP adds reflect legal/other items and prior credit loss issues: Q4 included $1.2M settlement and a $1.8M recovery related to a previous loss; 2024 featured $19.4M credit loss from a single MSP customer bankruptcy, underscoring risk exposure in customer base and receivables .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Millions)$414.0 $315.1 $309.9
Gross Profit Margin %21.9% 20.4% 20.0%
Net Income (Loss) ($USD Millions)$9.0 $2.6 $(3.8)
Diluted EPS ($USD)$0.26 $0.08 $(0.12)
Adjusted EBITDA ($USD Millions)$20.6 $10.3 $9.3
Adjusted EBITDA Margin %5.0% 3.3% 3.0%
Adjusted EPS ($USD)$0.29 $0.12 $0.04

Segment Breakdown

SegmentQ4 2023 Revenue ($M)Q3 2024 Revenue ($M)Q4 2024 Revenue ($M)
Nurse & Allied$367.2 $264.9 $256.9
Physician Staffing$46.9 $50.3 $53.0
Total$414.0 $315.1 $309.9

Segment Contribution Income

SegmentQ4 2023 ($M)Q3 2024 ($M)Q4 2024 ($M)
Nurse & Allied$33.9 $19.3 $20.3
Physician Staffing$1.9 $4.6 $3.5
Total$35.8 $23.9 $23.9

KPIs

KPIQ4 2023Q3 2024Q4 2024
Nurse & Allied FTEs9,570 7,660 7,621
Nurse & Allied Revenue per FTE per day ($)$414 $373 $363
Physician Days Filled23,578 24,424 25,427
Physician Revenue per Day Filled ($)$1,988 $2,058 $2,085

Balance Sheet and Cash Flow Highlights (Q4 2024)

  • Cash & Cash Equivalents: $81.6M; No debt outstanding .
  • Operating Cash Flow: $24.2M in Q4; $120.1M for FY 2024; 11-day y/y DSO improvement .
  • Share Repurchases: 0.3M shares in Q4 for $3.6M ($12.18 avg); $36.8M for 2024 (2.4M shares) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ4 2024$300M–$310M None provided due to pending Aya transaction Suspended
Adjusted EBITDAQ4 2024$11M–$13M None provided Suspended
Adjusted EPSQ4 2024$0.10–$0.14 None provided Suspended

Notes: Q4 actuals vs previous guidance — Revenue: $309.9M (high end) ; Adjusted EBITDA: $9.3M (below range) ; Adjusted EPS: $0.04 (below range) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Technology/PlatformRobust pipeline driven by Intellify (workforce solutions platform) Stabilization, demand rising amid bill rate stability Focus shifted to execution and pending Aya merger; no call hosted From platform-led pipeline to transaction focus
Business MixPhysician/Homecare sequential and y/y growth; Nurse & Allied challenged Physician/Homecare growth continues; Education momentum Strength in Physician, Education, Homecare; Nurse & Allied still soft Mix tilting to non-travel
Pricing/Bill RatesSequential gross margin uptick; DSO improved significantly Gross margin down; stabilization narrative Gross margin down further; operating cash flow stronger; DSO improvement Margins under pressure; collections solid
Legal/Credit/RegulatoryLarge customer bankruptcy credit loss ($19.4M YTD) Credit loss commentary persists; legal/other losses elevated Q4 includes settlement expense and recovery; no significant operational impact from MSP bankruptcy (majority wound down) Legacy legal/credit issues easing
Capital Allocation~$14.9M repurchases (Q2) ~$11.9M repurchases (Q3) ~$3.6M repurchases (Q4); $36.8M in 2024 Ongoing buybacks; moderation in Q4
M&A/Strategic——Aya to acquire Cross Country for $18.61/share (cash) Transaction-driven narrative dominates

Management Commentary

  • “Our fourth quarter top line performance was driven by continued strength in our non-travel businesses such as Physician Staffing, Education and Homecare… As we await the closing of the pending transaction with Aya Healthcare… we continue on our path of delivering clinical excellence…” — John A. Martins, President & CEO .
  • “Third quarter results reflect continued stabilization… margins remain under pressure… demand for our services continue to rise amidst bill rate stability.” — John A. Martins .
  • “Second quarter results were in line with expectations… strong pipeline for new business driven by the robustness of Intellify®.” — John A. Martins .

Q&A Highlights

  • The company did not host an earnings conference call for Q4 2024 given the pending Aya transaction; therefore, no Q&A or guidance clarifications were provided .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was not available due to S&P Global request limits during retrieval; therefore, an estimates comparison cannot be provided at this time.
  • Directionally, against management’s prior guidance (issued with Q3 results), revenue met the high end while adjusted EBITDA and adjusted EPS missed ranges, suggesting estimate revisions likely drift lower on profitability assumptions absent transaction considerations .

Key Takeaways for Investors

  • Revenue held near guidance high end, but margin pressure persisted: gross margin fell to 20.0% and adjusted EBITDA margin to 3.0%, with adjusted EPS at $0.04 versus prior guidance of $0.10–$0.14 .
  • Mix shift continues toward non-travel segments (Physician, Education, Homecare), partially offsetting Nurse & Allied volume/pricing headwinds; Physician Staffing delivered 13% y/y and 5% q/q growth .
  • Balance sheet is resilient with $81.6M cash, no debt, and improved DSO; Q4 OCF of $24.2M supports flexibility into merger closing .
  • Legal/credit overhangs from 2024 appear contained: Q4 included settlement and recovery; MSP bankruptcy-related credit loss was recognized earlier with no significant current operational impact .
  • Transaction is the dominant catalyst: Aya’s all-cash $18.61/share deal (~$615M) shifts focus to regulatory approval, stockholder vote, and closing timeline (expected H2 2025) .
  • Near-term trading: limited fundamental updates (no call/no guidance) may cap standalone volatility; any updates on deal timing/approvals or competing bids could move shares .
  • Medium-term thesis: if the transaction closes, upside is capped by the $18.61 consideration; downside risk is tied to deal uncertainty and continued margin pressure in core Nurse & Allied absent transaction completion .