AMN Healthcare Services Inc.
08/07/2026 | Press release | Distributed by Public on 08/07/2026 04:17
Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto and other financial information included elsewhere herein and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission ("SEC") on February 20, 2026 ("2025 Annual Report"). Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" are "forward-looking statements." See "Special Note Regarding Forward-Looking Statements." We undertake no obligation to update the forward-looking statements in this Quarterly Report. References in this Quarterly Report to "AMN Healthcare," the "Company," "we," "us" and "our" refer to AMN Healthcare Services, Inc. and its wholly owned subsidiaries.
Overview of Our Business
We provide technology-enabled healthcare workforce solutions and staffing services to healthcare organizations across the nation. The Company provides access to a comprehensive network of healthcare professionals through its recruitment strategies and breadth of career opportunities. We help providers optimize their workforce to reduce complexity and increase efficiency. Our total talent solutions include vendor-neutral and managed services programs, clinical and interim healthcare leaders, temporary staffing, permanent placement, executive search, vendor management systems, recruitment process outsourcing, language services, revenue cycle solutions, labor disruption and other services. Our diverse client base includes acute-care hospitals, community health centers and clinics, physician practice groups, retail and urgent care centers, home health facilities, schools, inpatient and outpatient rehabilitation facilities, ambulatory care facilities, outpatient surgical facilities, and many other healthcare settings.
We conduct business through three reportable segments: (1) nurse and allied solutions, (2) physician and leadership solutions, and (3) technology and workforce solutions. For the three months ended June 30, 2026, we recorded revenue of $673.2 million, as compared to $658.2 million for the same period last year. For the six months ended June 30, 2026, we recorded revenue of $2,051.6 million, as compared to $1,347.7 million for the same period last year.
Nurse and allied solutions segment revenue comprised 76% and 59% of total consolidated revenue for the six months ended June 30, 2026 and 2025, respectively. Through our nurse and allied solutions segment, we provide hospitals, other healthcare facilities, and schools with a comprehensive set of staffing solutions, including direct, vendor-neutral, and managed services solutions in which we manage and staff all the temporary and permanent nursing and allied staffing needs, as well as the revenue cycle management needs, of a client. A majority of our placements in this segment are under our managed services solution.
Physician and leadership solutions segment revenue comprised 16% and 26% of total consolidated revenue for the six months ended June 30, 2026 and 2025, respectively. Through our physician and leadership solutions segment, we place physicians of all specialties, as well as dentists and advanced practice providers, with clients on a temporary basis, generally as independent contractors. We also recruit physicians and healthcare leaders for permanent placement and place interim leaders and executives on variable-length assignments across all healthcare settings.
Technology and workforce solutions segment revenue comprised 8% and 15% of total consolidated revenue for the six months ended June 30, 2026 and 2025, respectively. Through our technology and workforce solutions segment, we provide hospitals and other healthcare facilities with a range of workforce solutions, including: (1) language services, (2) software-as-a-service ("SaaS")-based VMS technologies through which our clients can self-manage the procurement of contingent clinical labor and their internal float pool, (3) workforce optimization services that include advisory, planning, and analytics, and (4) recruitment process outsourcing services in which we recruit, hire and/or onboard permanent clinical and nonclinical positions on behalf of our clients.
In states where healthcare professionals have union representation, clients value the Company's ability to support them through labor disruption events. Strategic clients expect the Company to support them as part of building long-term partnerships. Even if somewhat recurrent over the long term, labor disruption events are unpredictable and have driven spikes in demand and related financial outcomes when they happen.
Operating Metrics
In addition to our consolidated and segment financial results, we monitor the following key metrics to help us evaluate our results of operations and financial condition and make strategic decisions. We believe this information is useful in understanding our operational performance and trends affecting our businesses.
•Average travelers on assignment represents the average number of nurse and allied healthcare professionals on assignment during the period, which is used by management as a measure of volume in our nurse and allied solutions segment;
•Bill rates represent the hourly straight-time rates that we bill to clients, which are an indicator of labor market trends and costs within our nurse and allied solutions segment;
•Billable hours represent the number of hours worked by our healthcare professionals that we are able to bill on client engagements, which are used by management as a measure of volume in our nurse and allied solutions segment;
•Days filled is calculated by dividing total locum tenens hours filled during the period by eight hours, which is used by management as a measure of volume in our locum tenens business within our physician and leadership solutions segment;
•Revenue per day filled is calculated by dividing revenue of our locum tenens business by days filled for the period, which is an indicator of labor market trends and costs in our locum tenens business within our physician and leadership solutions segment; and
•Minutes represent the time-based utilization of interpretation services that we are able to bill our clients, which are used by management as a measure of volume in our language services business within our technology and workforce solutions segment.
Recent Trends
The nurse and allied solutions segment included substantial labor disruption staffing revenue in the first quarter. The travel nurse division also was impacted by the labor disruption events, with heightened demand for rapid response nurses at elevated bill rates in the first quarter. While labor disruption and travel nurse revenue was lower sequentially in the second quarter, we are seeing positive trends in our base travel nurse business. Demand for travel nurses increased compared to the prior quarter and prior year along with increases in the percentage of orders filled, and as a result, traveler volume was higher than prior year. The international nurse business continued its sequential growth and year-over-year growth in the second quarter with strong traveler and direct placement growth. Allied staffing continued to experience sequential increases in demand during the second quarter, with volume demonstrating strong year-over-year growth.
In our physician and leadership solutions segment, demand for our locum tenens staffing business in the second quarter increased from prior year and prior quarter. Days filled were lower compared to prior year but up slightly sequentially. Revenue per day filled was in line with prior year but was down sequentially. Certified registered nurse anesthetists (CRNAs) continue to be the largest specialty for our locum tenens staffing business. Volume for our search business in the second quarter was higher compared to prior year and prior quarter, with particular strength in physician permanent placement and executive search. Demand for interim leadership was lower compared to prior year but higher sequentially.
In our technology and workforce solutions segment, second quarter minutes in our language services business were in line with prior year and higher compared to prior quarter. Ongoing pricing pressure for language services continues to be a headwind due to increased market competition. Volume in our VMS business declined compared to prior year and prior quarter.
Critical Accounting Policies and Estimates
The preparation of our consolidated financial statements in conformity with United States generally accepted accounting principles ("U.S. GAAP") requires us to make estimates and judgments that affect our reported amounts of assets and liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to intangible assets purchased in a business combination, asset impairments, accruals for self-insurance, compensation and related benefits, accounts receivable, contingencies and litigation, contingent consideration ("earn-out") liabilities associated with acquisitions, and income taxes. We base these estimates on the information that is currently available to us, and on various other assumptions that we believe are reasonable under the circumstances. Actual results could vary from these estimates under different assumptions or conditions. If these estimates differ significantly from actual results, our consolidated financial statements and future results of operations may be materially impacted. There have been no material changes in our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in our 2025 Annual Report.
Results of Operations
The following table sets forth, for the periods indicated, selected unaudited condensed consolidated statements of operations data as a percentage of revenue. Our results of operations include three reportable segments: (1) nurse and allied solutions, (2) physician and leadership solutions, and (3) technology and workforce solutions. Our historical results are not necessarily indicative of our future results of operations.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Unaudited Condensed Consolidated Statements of Operations: | |||||||||||||||||||||||
| Revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
| Cost of revenue | 69.4 | 70.2 | 72.0 | 70.7 | |||||||||||||||||||
| Gross profit | 30.6 | 29.8 | 28.0 | 29.3 | |||||||||||||||||||
| Selling, general and administrative | 21.9 | 23.5 | 17.8 | 22.4 | |||||||||||||||||||
| Depreciation and amortization | 4.7 | 5.7 | 3.2 | 5.7 | |||||||||||||||||||
| Goodwill impairment loss | - | 16.6 | - | 8.1 | |||||||||||||||||||
| Long-lived assets impairment loss | - | 2.8 | - | 1.4 | |||||||||||||||||||
| Income (loss) from operations | 4.0 | (18.8) | 7.0 | (8.3) | |||||||||||||||||||
| Interest expense, net, and other | 1.0 | 1.7 | 0.6 | 1.7 | |||||||||||||||||||
| Income (loss) before income taxes | 3.0 | (20.5) | 6.4 | (10.0) | |||||||||||||||||||
| Income tax expense (benefit) | (0.1) | (2.8) | 2.3 | (1.3) | |||||||||||||||||||
| Net income (loss) | 3.1 | % | (17.7) | % | 4.1 | % | (8.7) | % | |||||||||||||||
Comparison of Results for the Three Months Ended June 30, 2026 to the Three Months Ended June 30, 2025
Revenue. Revenue increased 2% to $673.2 million for the three months ended June 30, 2026 from $658.2 million for the same period in 2025, attributable to higher revenue in our nurse and allied solutions segment. Revenue broken down among the reportable segments is as follows:
| (In Thousands) | |||||||||||
| Three Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Nurse and allied solutions | $ | 421,968 | $ | 381,871 | |||||||
| Physician and leadership solutions | 164,582 | 174,531 | |||||||||
| Technology and workforce solutions | 86,687 | 101,773 | |||||||||
| $ | 673,237 | $ | 658,175 | ||||||||
Nurse and allied solutions segment revenue increased 11% to $422.0 million for the three months ended June 30, 2026 from $381.9 million for the same period in 2025. The $40.1 million increase was primarily attributable to a $20.3 million increase driven by a 6% increase in the average number of travelers on assignment, a $10.0 million increase in labor disruption revenue related to reserve releases and billing true ups from multiple large scale labor disruption events that we supported in the prior periods, an $8.6 million increase driven by non-volume revenue, and a $3.3 million increase driven by a 1% increase in average billable hours.
Physician and leadership solutions segment revenue decreased 6% to $164.6 million for the three months ended June 30, 2026 from $174.5 million for the same period in 2025. The $9.9 million decrease was primarily attributable to lower revenue in our locum tenens business, partially offset by higher revenue in our physician permanent placement and executive search business within the segment. Revenue in our locum tenens business declined $11.8 million (or 8%) due to a $12.1 million decline from an 8% decrease in the number of days filled. Our physician permanent placement and executive search business increased $2.5 million (or 26.7%) primarily due to higher new search volume in the quarter.
Technology and workforce solutions segment revenue decreased 15% to $86.7 million for the three months ended June 30, 2026 from $101.8 million for the same period in 2025. The $15.1 million decrease was primarily attributable to declines in our ongoing businesses and a service line divestiture. Revenue for our language services business declined $6.1 million (or 8%) primarily due to lower pricing, our other technology business declined $4.3 million (or 100%) due to the sale of our Smart Square scheduling software in the third quarter of 2025, and our VMS business declined $3.9 million (or 20%) due to lower staffing utilization on the platforms along with several client losses.
For the three months ended June 30, 2026 and 2025, revenue under our MSP arrangements comprised approximately 46% and 44% of consolidated revenue, 66% and 68% of nurse and allied solutions segment revenue, 19% and 17% of physician and leadership solutions segment revenue, and 1% and 3% of technology and workforce solutions segment revenue, respectively.
Cost of Revenue. Cost of revenue, which consists predominantly of compensation, benefits, housing, travel and allowance costs for healthcare professionals and medically qualified interpreters, increased 1% to $467.4 million for the three months ended June 30, 2026 from $461.8 million for the same period in 2025. The $5.6 million increase was primarily attributable to the increase in our nurse and allied solutions segment. Cost of revenue broken down among the reportable segments is as follows:
| (In Thousands) | |||||||||||
| Three Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Nurse and allied solutions | $ | 301,940 | $ | 290,746 | |||||||
| Physician and leadership solutions | 120,899 | 125,371 | |||||||||
| Technology and workforce solutions | 44,516 | 45,659 | |||||||||
| $ | 467,355 | $ | 461,776 | ||||||||
The increase in our nurse and allied solutions segment was primarily attributable to a $9.3 million increase in clinician pay package costs, including housing, travel and allowances, primarily due to the increase in the average number of travelers on assignment.
Gross Profit. Gross profit increased 5% to $205.9 million for the three months ended June 30, 2026 from $196.4 million for the same period in 2025, representing gross margins of 30.6% and 29.8%, respectively. The increase in consolidated gross margin for the three months ended June 30, 2026, as compared to the same period in 2025, was primarily due to higher margin in our nurse and allied solutions segment driven by reserve releases and billing true ups from multiple large scale labor disruption events that we supported in the prior periods. The overall increase was partially offset by (1) a lower margin in our physician and leadership solutions segment driven by increases in sales reserve and allowances and (2) a lower margin in our technology and workforce solutions segment primarily due to lower bill rates in our language services business due to increased market competition, a shift in sales mix resulting from reduced revenue in our higher-margin VMS business, and the sale of our Smart Square scheduling software. Gross margin by reportable segment for the three months ended June 30, 2026 and 2025 was 28.4% and 23.9% for nurse and allied solutions, 26.5% and 28.2% for physician and leadership solutions, and 48.6% and 55.1% for technology and workforce solutions, respectively. Gross profit broken down among the reportable segments is as follows:
| (In Thousands) | |||||||||||
| Three Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Nurse and allied solutions | $ | 120,028 | $ | 91,125 | |||||||
| Physician and leadership solutions | 43,683 | 49,160 | |||||||||
| Technology and workforce solutions | 42,171 | 56,114 | |||||||||
| $ | 205,882 | $ | 196,399 | ||||||||
Selling, General and Administrative Expenses. Selling, general and administrative ("SG&A") expenses consist predominantly of compensation and benefits costs for corporate employees, in addition to professional service fees, legal matter accruals and other overhead costs. SG&A expenses were $147.4 million, representing 21.9% of revenue, for the three months ended June 30, 2026, as compared to $154.6 million, representing 23.5% of revenue, for the same period in 2025. The decrease in SG&A expenses was primarily due to a $5.8 million decrease in the provision for expected credit losses. SG&A expenses broken down among the reportable segments, unallocated corporate overhead, and share-based compensation are as follows:
| (In Thousands) | |||||||||||
| Three Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Nurse and allied solutions | $ | 61,789 | $ | 62,642 | |||||||
| Physician and leadership solutions | 32,637 | 35,674 | |||||||||
| Technology and workforce solutions | 20,065 | 23,037 | |||||||||
| Unallocated corporate overhead | 23,045 | 24,404 | |||||||||
| Share-based compensation | 9,855 | 8,827 | |||||||||
| $ | 147,391 | $ | 154,584 | ||||||||
Depreciation and Amortization Expenses. Amortization expense decreased 11% to $17.5 million for the three months ended June 30, 2026 from $19.6 million for the same period in 2025, primarily attributable to having more intangible assets fully amortized during the three months ended June 30, 2026. Depreciation expense (exclusive of depreciation included in cost of revenue) decreased 23% to $14.1 million for the three months ended June 30, 2026 from $18.1 million for the same period in 2025, primarily attributable to the mix of depreciable assets and their useful lives. Additionally, $2.5 million and $2.1 million of depreciation expense for our language services business is included in cost of revenue for the three months ended June 30, 2026 and 2025, respectively.
Goodwill Impairment Loss. A goodwill impairment loss of $109.5 million was recognized in the physician and leadership solutions segment during the three months ended June 30, 2025.
Long-Lived Assets Impairment Loss. An impairment loss of $18.3 million was recognized for intangible assets during the three months ended June 30, 2025.
Interest Expense, Net, and Other. Interest expense, net, and other was $7.0 million during the three months ended June 30, 2026 as compared to $11.4 million for the same period in 2025. The decrease was primarily due to a lower average debt outstanding balance, as well as interest income earned on excess cash during the three months ended June 30, 2026.
Income Tax Benefit. Income tax benefit was $(1.3) million for the three months ended June 30, 2026 as compared to $(18.9) million for the same period in 2025, reflecting effective income tax rates of (6)% and 14% for these periods, respectively. The decrease in the effective income tax rate was primarily attributable to the recognition of $0.6 million of net discrete tax expense during the three months ended June 30, 2026 compared to a $0.9 million net discrete tax expense during the same period in 2025, along with a goodwill impairment loss recognized in the prior year, in relation to income (loss) before income taxes of $19.9 million and $(135) million for the three months ended June 30, 2026 and 2025, respectively. We currently estimate our annual effective tax rate to be approximately 36% for 2026. The (6)% effective tax rate for the three months ended June 30, 2026 differs from our estimated annual effective tax rate of 36% primarily due to certain tax benefits recognized during the three months ended June 30, 2026, in relation to income before income taxes.
Comparison of Results for the Six Months Ended June 30, 2026 to the Six Months Ended June 30, 2025
Revenue. Revenue increased 52% to $2,051.6 million for the six months ended June 30, 2026 from $1,347.7 million for the same period in 2025, attributable to higher revenue in our nurse and allied solutions segment. Revenue broken down among the reportable segments is as follows:
| (In Thousands) | |||||||||||
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Nurse and allied solutions | $ | 1,549,310 | $ | 795,132 | |||||||
| Physician and leadership solutions | 328,506 | 348,596 | |||||||||
| Technology and workforce solutions | 173,782 | 203,980 | |||||||||
| $ | 2,051,598 | $ | 1,347,708 | ||||||||
Nurse and allied solutions segment revenue increased 95% to $1,549.3 million for the six months ended June 30, 2026 from $795.1 million for the same period in 2025. The $754.2 million increase was primarily attributable to a $693.0 million increase in labor disruption revenue from multiple large scale labor disruption events that we supported in the current year, a $30.4 million increase driven by a 4% increase in the average number of travelers on assignment, a $19.1 million increase
driven by an approximately 3% increase in the average bill rate, and a $6.4 million increase driven by an approximately 1% increase in average billable hours.
Physician and leadership solutions segment revenue decreased 6% to $328.5 million for the six months ended June 30, 2026 from $348.6 million for the same period in 2025. The $20.1 million decrease in the segment revenue was primarily attributable to a decline in revenue in our locum tenens business due to a $25.0 million decline driven by a 9% decrease in the number of days filled, partially offset by a $3.5 million increase driven by a 1% increase in the revenue per day filled.
Technology and workforce solutions segment revenue decreased 15% to $173.8 million for the six months ended June 30, 2026 from $204.0 million for the same period in 2025. The $30.2 million decrease was primarily attributable to declines in our ongoing businesses and a service line divestiture. Revenue for our language services business declined $12.1 million (or 8%) primarily due to lower pricing, our other technology business declined $8.7 million (or 100%) due to the sale of our Smart Square scheduling software in the third quarter of 2025, and our VMS business declined $7.3 million (or 19%) primarily due to lower staffing utilization on the platforms along with several client losses.
For the six months ended June 30, 2026 and 2025, revenue under our MSP arrangements comprised approximately 65% and 46% of consolidated revenue, 82% and 69% of nurse and allied solutions segment revenue, 20% and 18% of physician and leadership solutions segment revenue, and 1% and 4% of technology and workforce solutions segment revenue, respectively.
Cost of Revenue. Cost of revenue increased 55% to $1,476.9 million for the six months ended June 30, 2026 from $953.2 million for the same period in 2025. The $523.7 million increase was primarily attributable to the increase in our nurse and allied solutions segment. Cost of revenue broken down among the reportable segments is as follows:
| (In Thousands) | |||||||||||
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Nurse and allied solutions | $ | 1,146,819 | $ | 610,134 | |||||||
| Physician and leadership solutions | 241,976 | 251,883 | |||||||||
| Technology and workforce solutions | 88,085 | 91,172 | |||||||||
| $ | 1,476,880 | $ | 953,189 | ||||||||
The increase in our nurse and allied solutions segment was primarily attributable to a $529.6 million increase in clinician pay package costs, including housing, travel and allowances, primarily due to the increase in labor disruption activities.
Gross Profit. Gross profit increased 46% to $574.7 million for the six months ended June 30, 2026 from $394.5 million for the same period in 2025, representing gross margins of 28.0% and 29.3%, respectively. The decline in consolidated gross margin for the six months ended June 30, 2026, as compared to the same period in 2025, was primarily due to (1) lower margins in our physician and leadership solutions segments driven by increases in sales reserve and allowances, compression in provider rates, including housing and travel, and increased market competition and (2) a lower margin in our technology and workforce solutions segment primarily due to pricing pressure for our language services business due to increased market competition and a shift in sales mix resulting from reduced revenue in our higher-margin VMS business and the sale of our Smart Square scheduling software. The overall decline was partially offset by a revenue mix shift to higher margin labor disruption business in our nurse and allied solutions segment. Gross margin by reportable segment for the six months ended June 30, 2026 and 2025 was 26.0% and 23.3% for nurse and allied solutions, 26.3% and 27.7% for physician and leadership
solutions, and 49.3% and 55.3% for technology and workforce solutions, respectively. Gross profit broken down among the reportable segments is as follows:
| (In Thousands) | |||||||||||
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Nurse and allied solutions | $ | 402,491 | $ | 184,998 | |||||||
| Physician and leadership solutions | 86,530 | 96,713 | |||||||||
| Technology and workforce solutions | 85,697 | 112,808 | |||||||||
| $ | 574,718 | $ | 394,519 | ||||||||
Selling, General and Administrative Expenses. SG&A expenses were $365.8 million, representing 17.8% of revenue, for the six months ended June 30, 2026, as compared to $302.3 million, representing 22.4% of revenue, for the same period in 2025. The increase in SG&A expenses was primarily due to a $43.7 million increase in employee compensation and benefits (inclusive of share-based compensation) and a $21.8 million increase in other expenses primarily in support of the large labor disruption events in the current year. SG&A expenses broken down among the reportable segments, unallocated corporate overhead, and share-based compensation are as follows:
| (In Thousands) | |||||||||||
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Nurse and allied solutions | $ | 190,922 | $ | 124,277 | |||||||
| Physician and leadership solutions | 64,666 | 68,765 | |||||||||
| Technology and workforce solutions | 40,741 | 46,456 | |||||||||
| Unallocated corporate overhead | 49,740 | 44,609 | |||||||||
| Share-based compensation | 19,747 | 18,208 | |||||||||
| $ | 365,816 | $ | 302,315 | ||||||||
Depreciation and Amortization Expenses. Amortization expense decreased 9% to $35.4 million for the six months ended June 30, 2026 from $39.0 million for the same period in 2025, primarily attributable to certain intangible assets becoming fully amortized during the six months ended June 30, 2026. Depreciation expense (exclusive of depreciation included in cost of revenue) decreased 20% to $29.4 million for the six months ended June 30, 2026 from $36.6 million for the same period in 2025, primarily attributable to the mix of depreciable assets and their useful lives. Additionally, $4.9 million and $4.1 million of depreciation expense for our language services business is included in cost of revenue for the six months ended June 30, 2026 and 2025, respectively.
Goodwill Impairment Loss. A goodwill impairment loss of $109.5 million was recognized in the physician and leadership solutions segment during the six months ended June 30, 2025.
Long-Lived Assets Impairment Loss. An impairment loss of $18.3 million was recognized for intangible assets during the six months ended June 30, 2025.
Interest Expense, Net, and Other. Interest expense, net, and other was $13.7 million during the six months ended June 30, 2026 as compared to $23.7 million for the same period in 2025. The decrease was primarily due to a lower average debt outstanding balance, as well as interest income earned on excess cash during the six months ended June 30, 2026.
Income Tax Expense (Benefit). Income tax expense (benefit) was $47 million for the six months ended June 30, 2026 as compared to $(17.6) million for the same period in 2025, reflecting effective income tax rates of 36% and 13% for the six months ended June 30, 2026 and 2025, respectively. The increase in the effective income tax rate was primarily attributable to a significant increase in income (loss) before income taxes year over year, mostly related to the increase in labor disruption revenue in the current year and the goodwill impairment loss recognized in the prior year.
Liquidity and Capital Resources
In summary, our cash flows were:
| (In Thousands) | |||||||||||
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net cash provided by operating activities | $ | 372,522 | $ | 171,219 | |||||||
| Net cash used in investing activities | (19,714) | (46,637) | |||||||||
| Net cash used in financing activities | (29,500) | (141,437) | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 323,308 | $ | (16,855) | |||||||
Historically, our primary liquidity requirements have been for acquisitions, working capital requirements, and debt service under our credit facilities and senior notes. We have funded these requirements through internally generated cash flow and funds borrowed under our credit facilities and senior notes.
As of June 30, 2026, (1) no amount was drawn with $430.0 million of available credit under our $450.0 million secured revolving credit facility (the "Senior Credit Facility"), (2) the aggregate principal amount of our 4.000% senior notes due 2029 (the "2029 Notes") outstanding was $350.0 million, and (3) the aggregate principal amount of our 6.500% senior notes due 2031 (the "2031 Notes") outstanding was $400.0 million. We describe in further detail our Amended Credit Agreement (as defined below), under which the Senior Credit Facility is governed, the 2029 Notes, and the 2031 Notes in Part II, Item 8, "Financial Statements and Supplementary Data-Notes to Consolidated Financial Statements-Note (9), Notes Payable and Credit Agreement" of our 2025 Annual Report.
As of June 30, 2026, the total of our contractual obligations under operating leases with initial terms in excess of one year was $38.0 million. We describe in further detail our operating lease arrangements in Part II, Item 8, "Financial Statements and Supplementary Data-Notes to Consolidated Financial Statements-Note (6), Leases" of our 2025 Annual Report. We also have various obligations and working capital requirements, such as certain tax and legal matters, contingent consideration and other liabilities, that are recorded on our consolidated balance sheets. See additional information in the accompanying Note (6), "Fair Value Measurement," Note (7), "Income Taxes," Note (8), "Commitments and Contingencies," and Note (9), "Balance Sheet Details."
In addition to our cash requirements, we have a share repurchase program authorized by our board of directors, which does not require the purchase of any minimum number of shares and may be suspended or discontinued at any time. See additional information in the accompanying Part II, Item 2, "Unregistered Sales of Equity Securities and Use of Proceeds."
We believe that cash generated from operations and available borrowings under the Senior Credit Facility will be sufficient to fund our operations and liquidity requirements, including expected capital expenditures, for the next 12 months and beyond. We intend to finance potential future acquisitions with cash provided from operations, borrowings under the Senior Credit Facility or other borrowings under our Amended Credit Agreement, bank loans, debt or equity offerings, or some combination of the foregoing. The following discussion provides further details of our liquidity and capital resources.
Operating Activities
Net cash provided by operating activities for the six months ended June 30, 2026 was $372.5 million, compared to $171.2 million for the same period in 2025. The increase in net cash provided by operations was primarily attributable to (1) a year-over-year increase in net income (loss) excluding non-cash items of $95.5 million primarily due to higher segment operating income in our nurse and allied solutions segment, (2) an increase in other liabilities between periods of $91.2 million primarily related to receipts of client deposits and related reserves, (3) an increase in accounts payable and accrued expenses between periods of $37.9 million primarily due to the timing of payments, and (4) an increase in accrued compensation and benefits between periods of $33.2 million primarily related to our labor disruption services.
The overall increase in net cash provided by operating activities was partially offset by an increase in accounts receivable and subcontractor receivables between periods of $52.4 million primarily due to the timing of collections.
Our Days Sales Outstanding ("DSO") was 52 days as of June 30, 2026, 47 days as of December 31, 2025, and 54 days as of June 30, 2025; excluding our labor disruption business, DSO was 54 days, 56 days and 56 days, respectively.
Investing Activities
Net cash used in investing activities for the six months ended June 30, 2026 was $19.7 million, compared to net cash used in investing activities of $46.6 million for the same period in 2025. The decrease was primarily due to net proceeds of investments of $0.2 million during the six months ended June 30, 2026, as compared to a net purchase of $26.9 million during the six months ended June 30, 2025. In addition, capital expenditures were $15.8 million and $19.8 million for the six months ended June 30, 2026 and 2025, respectively.
Financing Activities
Net cash used in financing activities during the six months ended June 30, 2026 was $29.5 million, due to repayments of $25.0 million under the Senior Credit Facility, $2.3 million paid in connection with the repurchase of our common stock, and $2.2 million in cash paid for shares withheld for payroll taxes resulting from the vesting of employee equity awards. Net cash used in financing activities during the six months ended June 30, 2025 was $141.4 million, due to repayments of $185.0 million under the Senior Credit Facility and $1.4 million in cash paid for shares withheld for payroll taxes resulting from the vesting of employee equity awards, partially offset by borrowings of $45.0 million under the Senior Credit Facility.
Amended Credit Agreement
On October 6, 2025, we entered into the fifth amendment to our credit agreement (the "Fifth Amendment"). The Fifth Amendment (together with the credit agreement as amended to such date, collectively, the "Amended Credit Agreement") provides for, among other things, the following: (i) an extension of the maturity date of Senior Credit Facility to October 6, 2030, (ii) a decrease of the revolving commitments to $450.0 million, and (iii) the revision of the Consolidated Net Leverage Ratio (as calculated in accordance with the amended credit agreement) to be no greater than 5.25 to 1.00 through March 31, 2027.
Our obligations under the Amended Credit Agreement are secured by substantially all of our assets. We describe in further detail the terms of the Amended Credit Agreement in Part II, Item 8, "Financial Statements and Supplementary Data-Notes to Consolidated Financial Statements-Note (9), Notes Payable and Credit Agreement" of our 2025 Annual Report.
Letters of Credit
At June 30, 2026, we maintained outstanding standby letters of credit totaling $20.7 million as collateral in relation to our workers' compensation insurance agreements and a corporate office lease agreement. Of the $20.7 million of outstanding letters of credit, we have collateralized approximately $0.7 million in cash and cash equivalents and the remaining approximately $20.0 million is collateralized by the Senior Credit Facility. Outstanding standby letters of credit at December 31, 2025 totaled $20.8 million.
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, "Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses". The guidance requires public entities to disclose, in the notes to the financial statement, a disaggregation of certain expense categories that are included within the line items presented on the face of income statements, on an annual and interim basis. This standard is effective on either a prospective or retrospective basis for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of adopting this standard on our disclosures.
In September 2025, the FASB issued ASU 2025-06, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software". The new guidance removed prescriptive and sequential software development stages, requires public entities to capitalize internal-use software costs with management authorization and allows the probability that the software will be completed and used for its intended function. This standard is effective on a prospective basis for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact of adopting this standard on our consolidated financial statements and disclosures.
In December 2025, the FASB issued ASU 2025-11, "Interim Reporting (Topic 270): Narrow-Scope Improvements". The ASU clarifies interim disclosure requirements and the applicability of Topic 270. The amendment of current guidance provides further clarity about the current interim disclosure requirements. This standard is effective on either a prospective or retrospective basis for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact of adopting this standard on our consolidated financial statements and disclosures.
There have been no other new accounting pronouncements issued but not yet adopted that are expected to materially affect our consolidated financial condition or results of operations.
Special Note Regarding Forward-Looking Statements
This Quarterly Report contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We base these forward-looking statements on our expectations, estimates, forecasts, and projections about future events and about the industry in which we operate. Forward-looking statements are identified by words such as "believe," "anticipate," "expect," "intend," "plan," "will," "should," "would," "project," "may," variations of such words, and other similar expressions. In addition, any statements that refer to projections of demand or supply trends, financial items, anticipated growth, future growth and revenues, future economic conditions and performance, plans, objectives and strategies for future operations, expectations, or other characterizations of future events or circumstances are forward-looking statements. All forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those discussed in, or implied by, these forward-looking statements. Factors that could cause actual results to differ materially from those implied by the forward-looking statements in this Quarterly Report are set forth in our 2025 Annual Report and include but are not limited to:
•the ability of our clients to increase the efficiency and effectiveness of their staffing management and recruiting efforts, through predictive analytics, automation, machine learning, artificial intelligence ("AI") or other advanced technologies or otherwise, and successfully hire and retain permanent staff, which may negatively affect our revenue, results of operations, and cash flows;
•the effects of any future pandemic or health crisis on our business, financial condition and results of operations;
•the effects of economic downturns, inflation, recession or slow recoveries, or additional changes in or continued uncertainty with respect to governmental policies, which could result in less demand for our services, increased client initiatives designed to contain costs, including reevaluating their approach as it pertains to contingent labor and managed services programs;
•any inability on our part to anticipate and quickly respond to changing marketplace conditions, such as alternative modes of healthcare delivery, reimbursement, or client needs and requirements;
•the level of consolidation and concentration of buyers of healthcare workforce, staffing and technology solutions, which could affect the pricing of our services and our ability to mitigate concentration risk;
•the negative effects that intermediary organizations may have on our ability to secure new and profitable contracts;
•a decline in the size of the insured population as a result of a repeal or significant erosion of the Patient Protection and Affordable Care Act;
•the effect of investigations, claims, and legal proceedings alleging medical malpractice, anti-competitive conduct, violations of employment, privacy and wage regulations and other legal theories of liability asserted against us, which could subject us to substantial liabilities;
•any inability on our part to grow and operate our business profitably in compliance with federal and state regulation, including privacy laws, conduct of operations, costs and payment for services and payment for referrals as well as laws regarding employment and compensation practices and government contracting;
•changes in United States immigration laws and policies, including those relating to workers from outside the United States and visa retrogression;
•any challenge to the classification of certain of our healthcare professionals as independent contractors, which could adversely affect our profitability;
•any inability on our part to recruit and retain sufficient quality healthcare professionals at reasonable costs, which could increase our operating costs and negatively affect our business and profitability;
•any technology disruptions or our inability to implement new infrastructure and technology systems effectively may adversely affect our operating results and ability to manage our business effectively;
•any failure to further develop and evolve our current workforce solutions technology offerings and capabilities, an increase in competition, or the ability of our competitors to respond more quickly to new or emerging client needs and marketplace conditions, which may harm our business and/or impact our ability to compete;
•disruption to or failures of our SaaS-based or technology-enabled services, or our inability to adequately protect our intellectual property rights with respect to such technologies or sufficiently protect the privacy of personal information, could reduce client satisfaction, harm our reputation and negatively affect our business;
•security breaches and cybersecurity incidents, including ransomware, that could compromise our information and systems, which could adversely affect our business operations and reputation and could subject us to substantial liabilities;
•widespread use of AI;
•any inability on our part to quickly and properly credential and match quality healthcare professionals with suitable placements, which may adversely affect demand for our services;
•any inability on our part to continue to attract, develop and retain our sales and operations team members, which may deteriorate our operations;
•our increasing dependence on third parties, including offshore vendors, for the execution of certain critical functions;
•the loss of our key officers and management personnel, which could adversely affect our business and operating results;
•any inability on our part to maintain our positive brand awareness and identity, which may adversely affect our results of operations;
•any inability to consummate and effectively incorporate acquisitions into our business operations, which may adversely affect our long-term growth and our results of operations;
•businesses we acquire may have liabilities or adverse operating issues, which could harm our operating results;
•any increase to our business and operating risks as we develop new services and clients, enter new lines of business, and focus more of our business on providing a full range of client solutions;
•the expansion of social media platforms presents new risks and challenges, which could cause damage to our brand reputation;
•any recognition of an impairment to the substantial amount of goodwill or intangible assets on our balance sheet, which could result in a material adverse impact to our results of operations;
•our indebtedness, which could adversely affect our ability to raise additional capital to fund operations, limit our ability to react to changes in the economy or our industry, and expose us to interest rate risk to the extent of any variable rate debt;
•the terms of our debt instruments that impose restrictions on us that may affect our ability to successfully operate our business;
•variable rate indebtedness; and
•the effect of significant adverse adjustments to our insurance-related accruals on our balance sheet, which could decrease our earnings or increase our losses and negatively impact our cash flows.
AMN Healthcare Services Inc. published this content on August 07, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on August 07, 2026 at 10:18 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]