Executive Summary / Key Takeaways

• AMN Healthcare Services, Inc. ($AMN) is strategically positioned as a leader in technology-enabled healthcare workforce solutions, leveraging its integrated platforms like WorkWise, ShiftWise Flex, and AMN Passport to drive efficiency and client satisfaction.
• The company demonstrated financial resilience in Q3 2025, with revenue of $634 million and adjusted EBITDA of $57.5 million exceeding guidance, despite ongoing market transitions and gross margin pressures.
• AMN is actively managing its portfolio, exemplified by the strategic sale of Smart Square software, and has significantly strengthened its balance sheet through debt reduction and a recent refinancing, extending debt maturities and increasing financial flexibility.
• A return to growth is anticipated in key segments for 2026, including a projected 20-plus percent revenue increase in international nurse staffing and a positive turnaround for the VMS business, which are expected to lift consolidated gross margins.
• The evolving healthcare landscape, marked by increasing patient utilization, a historical low in the premium spread for contingent labor, and a growing client desire for flexible, total talent solutions, creates a compelling long-term opportunity for AMN.

The Evolving Healthcare Workforce Landscape and AMN's Strategic Foundation

AMN Healthcare Services, Inc., founded in 1985, stands as a pivotal force in the United States healthcare staffing and workforce solutions industry. The company's core mission revolves around providing technology-enabled solutions that address the complex talent needs of acute and sub-acute care hospitals and other healthcare facilities. This encompasses a broad spectrum of services, including temporary staffing, permanent placement, executive search, and sophisticated workforce optimization tools.

The healthcare industry has undergone significant shifts in recent years, particularly in the wake of the COVID-19 pandemic. Initially, the period from 2020 to 2022 saw acute workforce difficulties, leading to unprecedented demand for contingent labor. However, by 2024, the sector largely addressed its permanent staffing deficit, prompting a renewed focus on cost management and alternative staffing models. This transition has created a dynamic environment where healthcare organizations are increasingly seeking flexibility to meet rising patient utilization while managing escalating labor costs. Notably, permanent hiring activity in the healthcare sector experienced a significant decline in Q3 2025, according to a private survey of job openings. This trend, coupled with the fact that the spread between Travel Nurse bill rates and fully loaded permanent nurse compensation is at a historical low, suggests a growing inclination among employers to embrace flexible workforce strategies.

AMN's overarching strategy is to be the premier partner for "total talent solutions," moving beyond simple staffing to offer integrated, technology-driven approaches that help clients build and sustain high-quality, cost-effective workforces. This strategy is foundational to its competitive positioning and long-term growth.

Technological Edge: AMN's Innovation Moat

AMN's commitment to technological differentiation is a cornerstone of its competitive strategy, providing tangible and quantifiable benefits across its operations. The company has invested heavily in developing and integrating advanced platforms that enhance efficiency, clinician engagement, and client satisfaction.

Central to this technological moat is the WorkWise platform, which integrates demand forecasting, staffing and sourcing, predictive scheduling, and workforce management solutions. WorkWise has garnered positive reception from both new and existing clients, serving as a powerful tool for optimizing labor versus quality, supply, and cost. A key component of WorkWise is ShiftWise Flex, AMN's next-generation Vendor Management System (VMS). By the end of 2024, ShiftWise Flex was rolled out to almost all ShiftWise users, offering ease of use, automation of key functions, support for diverse clinical and non-clinical roles, and data-packed market pricing surveillance. This platform is poised to attract new clients in 2025 and beyond, enhancing AMN's ability to manage contingent labor more efficiently.

Another significant differentiator is AMN Passport, the company's market-leading app for healthcare professionals. Passport now covers travel and per diem nurse, allied, and locum tenens specialties, and its capabilities have been extended to manage float pool workers and labor disruption events. The app has surpassed 300,000 registered users, and more than 20% of Nurse and Allied placements are now assisted by Passport automation, demonstrating its impact on efficiency and user engagement. For locum tenens physicians, Passport enables shift work submission directly through the app, which is expected to greatly speed the submission process, reduce errors, and improve physician satisfaction.

AMN has also made early and successful strides in integrating AI capabilities across its operations. This includes AI matching capabilities in its Locums business, which helps recruiters with speed, and AI-enabled event management technology for labor disruption support. These AI tools are designed to reduce costs, improve service delivery, and enhance recruiter productivity by approximately 4% on average. The company's aggressive plan to improve technology, processes, and customer focus has yielded a 700 basis point year-over-year improvement in client satisfaction, underscoring the effectiveness of its technological investments.

These technological advancements are not merely operational improvements; they are strategic assets that contribute directly to AMN's competitive moat. They enable higher fill rates (doubling its fill rate in the vendor-neutral program over the past 12 months), lower operational costs, and provide a superior, more integrated experience for both clients and clinicians. This technological leadership allows AMN to command premium contracts, expand its market share, and drive long-term growth by offering solutions that competitors struggle to replicate.

Competitive Arena: Differentiated for Dominance

The healthcare staffing industry remains intensely competitive and fragmented, with AMN Healthcare operating alongside a mix of publicly traded and private entities. Key publicly traded direct competitors include Cross Country Healthcare (CCRN), Robert Half International (RHI), and Kelly Services (KELYA), each with varying degrees of overlap in AMN's core segments.

AMN's competitive standing is robust, particularly due to its specialized focus on healthcare and its integrated technology platforms. Compared to Cross Country Healthcare (CCRN), which also specializes in healthcare staffing, AMN's broader portfolio of technology-enabled solutions, including its comprehensive WorkWise platform and advanced VMS, offers greater efficiency in matching professionals to roles. AMN's multi-segment approach, encompassing physician leadership and technology solutions, provides a more end-to-end service offering that appeals to clients seeking holistic workforce management. While CCRN may have an edge in pure staffing scale and rapid deployment in certain segments, AMN's brand recognition and diverse service lines often lead to stronger customer retention and faster innovation cycles.

Against Robert Half International (RHI), a broader professional staffing firm, AMN's healthcare-centric approach in physician and leadership solutions provides a distinct advantage. AMN's specialized credentialing and placement processes, coupled with its integrated technology, offer greater efficiency in healthcare talent acquisition. RHI's strengths lie in its global reach and scale in general staffing, which can translate to cost leadership in broader segments. However, AMN's tailored healthcare solutions and specialized brands foster deeper client loyalty and potentially higher margins in its niche.

When compared to Kelly Services (KELYA), which offers a wide range of workforce solutions including healthcare staffing, AMN's technology integration, such as its VMS for contingent labor management, provides materially greater efficiency in workforce deployment. AMN's focus on healthcare innovation positions it to capture market share in specialized roles, while KELYA's strength is in broad temporary staffing. AMN's regulatory expertise and branded services offer a unique value proposition, leading in client satisfaction and innovation speed within healthcare.

The industry is also experiencing a trend towards consolidation, with recent acquisition announcements and some smaller players exiting the market. AMN views this consolidation as a long-term positive, as it believes the industry needs to rationalize excess capacity that emerged post-COVID. Management observes that competitors are increasingly rational, resisting unprofitable margins, which contributes to an increase in unfilled orders when bill rates are not market-appropriate. This dynamic favors AMN's strategy of educating clients on competitive market rates, as its diversified solutions and financial strength allow it to maintain profitability where others may struggle.

Financial Performance: Resilience Amidst Transition

AMN Healthcare has demonstrated financial resilience in a transitioning market, with its recent performance reflecting both the challenges of post-pandemic normalization and the benefits of its strategic initiatives. For the third quarter of 2025, the company reported revenue of $634 million, exceeding the high end of its guidance range by $9 million. Consolidated gross margin was 29.1%, near the upper end of guidance, and adjusted EBITDA reached $57.5 million, or 9.1% of revenue, surpassing the high end of guidance by 90 basis points.

Despite these positive beats, consolidated gross margin has faced pressure throughout 2025, declining due to an unfavorable revenue mix shift and competitive pressures in staffing and language services. For the three months ended September 30, 2025, the decline was primarily attributed to lower margins in Nurse and Allied Solutions (24.1%) due to increased provider pay packages, lower margins in Physician and Leadership Solutions (27.2%) as physician compensation outpaced revenue per day filled, and a lower margin in Technology and Workforce Solutions (51.5%) due to pricing pressure in language services and a shift in sales mix.

The company recognized a goodwill impairment loss of $109.5 million in the Physician and Leadership Solutions segment during the nine months ended September 30, 2025. This impairment was driven by lower-than-expected volume and gross margin pressures in locum tenens, alongside declining demand for interim leadership and permanent placement solutions. An additional $18.3 million impairment loss was recognized for intangible assets within the Nurse and Allied segment's revenue cycle solutions business due to forecasted revenue declines.

In a strategic move, AMN completed the sale of its Smart Square healthcare scheduling software on July 1, 2025, generating a preliminary gain of $39.2 million. This divestiture, while reducing annualized revenue by approximately $17 million and adjusted EBITDA by about $6 million starting in Q3 2025, is viewed as a strategic decision to expand technology partnerships and focus capital on higher-growth areas.

From a liquidity standpoint, AMN has significantly strengthened its balance sheet. Net cash provided by operating activities for the nine months ended September 30, 2025, was $193.9 million. The company ended Q3 2025 with a $0 balance on its revolving line of credit, a substantial reduction from $210 million at the end of 2024. In early October 2025, AMN completed a debt refinancing, issuing $400 million of 6.50% senior notes due 2031 and redeeming the entire $500 million outstanding principal of its 2027 Notes. This transaction, coupled with an extension of its Senior Credit Facility maturity to October 2030 and revised leverage ratio covenants (no greater than 5.25 to 1 through March 31, 2027), significantly enhances its financial flexibility and reduces interest expense.

Management anticipates the revolver balance to be around $30 million by the end of Q3 2025, with a clear path to being fully paid off by year-end or shortly thereafter.

Strategic Initiatives & Operational Excellence

AMN's strategic initiatives are designed to capitalize on the evolving healthcare landscape and leverage its technological advantages. The company's focus on "total talent solutions" is resonating with clients who are increasingly looking for strategic partners to manage their complex workforce needs.

A key operational achievement has been the improvement in fill rates, with the company doubling its fill rate in its vendor-neutral program over the past 12 months. This is a direct result of investments in technology and process improvements. AMN is also expanding its service lines to existing clients, observing significant interest in consolidating decentralized locum spend, particularly among regional and national systems. This has led to strong year-over-year growth in locum tenens days booked for MSP clients (15% in Q3 2025).

The labor disruption business has emerged as a differentiated solution, with AMN building a leading event management technology and strengthening its ability to manage these activities without disrupting core services. The company has a healthy pipeline of strikes for the next 12 months, and this business is expected to remain active.

The international nurse staffing business, while facing headwinds from Visa retrogression in 2024 and early 2025, is positioned for a multi-year recovery. Management anticipates sequential growth in volume and revenue starting in Q4 2025, with revenue projected to be up 20-plus percent in 2026, driven by an expected forward movement of Visa retrogression dates. This higher-margin business is crucial for lifting consolidated gross margins. Similarly, the VMS business is expected to turn positive in 2026, benefiting from the conclusion of client transitions and new client wins.

Outlook & Guidance: Charting a Course for Growth

AMN Healthcare's outlook reflects a cautious yet optimistic view, anticipating a gradual return to growth driven by market stabilization and strategic execution. For the fourth quarter of 2025, the company projects consolidated revenue to be around $715 million to $730 million. This guidance includes approximately $100 million in Labor Disruption revenue, which, while boosting the top line, is expected to nominally impact gross and adjusted EBITDA margins due to its lower-margin profile. Excluding Labor Disruption, Q4 revenue is expected to be just over $620 million. Adjusted EBITDA margin for Q4 2025 is projected to be between 6.8% and 7.3%, or in the mid-6s range when excluding the impact of Labor Disruption.

A significant positive indicator is the expectation for Nurse and Allied Staffing bill rates to be up modestly year-over-year in Q4 2025, marking the first such increase in three years. This is crucial for driving volume, as AMN emphasizes that orders priced correctly can be filled. Total Nurse and Allied revenue is expected to be up low single digits year-over-year in Q4, or down approximately 6% to 8% excluding Labor Disruption, representing the best year-over-year revenue comparison for the segment in three years. The Q4 Nurse and Allied segment gross margin is expected to be approximately 21%, influenced by seasonally lower average hours worked and a modest decline in spreads.

Looking into 2026, AMN anticipates a stabilization of staffing gross margins as Nurse and Allied demand transitions from stability to growth. Improvement in international staffing revenue and other high-margin services are expected to lift consolidated gross margins. International Nurse revenue is projected to increase by over 20% in 2026, contributing significantly to both top-line and EBITDA growth. The VMS business is also expected to return to positive growth in 2026, following the conclusion of client transitions. Management views the Q4 normalized gross margin (estimated between 26.5% and 27%) as a potential floor, with opportunities for improvement in 2026.

Risks & Challenges

Despite a positive outlook, AMN faces several pertinent risks and challenges. The competitive environment remains intense, with ongoing pricing pressure, particularly in language services due to industry consolidation. While AMN's diversified solutions and technology provide an advantage, the motivation for clients to switch vendors has been low, requiring continuous innovation and strong client retention efforts.

The international nurse staffing business remains susceptible to the unpredictable nature of Visa retrogression dates, which, if they do not move forward as anticipated, could delay the expected recovery and impact revenue and EBITDA growth. Academic medical centers, which constitute about 20% of AMN's consolidated revenue, have taken strong measures to reduce spending in response to federal funding cuts for research, although they are showing signs of stabilization.

The company is also subject to various legal proceedings, including class and representative actions related to wage and hour claims, which could result in substantial liabilities. Furthermore, while bill rates for Nurse and Allied Staffing are expected to rise modestly, a consistent and broader increase across the industry is needed to fully offset underlying wage inflation and further improve margins.

Conclusion

AMN Healthcare is strategically positioned to capitalize on the evolving dynamics of the healthcare workforce, leveraging its deep industry expertise and robust technological infrastructure. The company's proactive approach to innovation, particularly through platforms like WorkWise, ShiftWise Flex, and AMN Passport, provides a significant competitive advantage in delivering integrated, efficient, and high-quality talent solutions. This technological leadership, coupled with a diversified service offering, underpins AMN's ability to drive client satisfaction, improve operational efficiency, and capture market share in a competitive landscape.

Despite recent gross margin pressures and the impact of market transitions, AMN's strong financial performance in Q3 2025 and its proactive balance sheet management, including significant debt reduction and a strategic refinancing, demonstrate its resilience. The outlook for 2026 signals a return to growth in key segments, with international nurse staffing and the VMS business expected to be significant contributors to revenue and margin expansion. As healthcare organizations increasingly seek flexible and sustainable workforce solutions to meet rising patient demand, AMN's commitment to total talent solutions and its technological differentiation position it as a compelling investment opportunity poised for long-term value creation.