Cross Country Healthcare Inc.
08/06/2025 | Press release | Distributed by Public on 08/06/2025 14:45
Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The purpose of the following Management's Discussion and Analysis (MD&A) is to help facilitate the understanding of significant factors influencing the quarterly operating results, financial condition, and cash flows of the Company. Additionally, MD&A also conveys our current expectations of the potential impact of known trends, events, or uncertainties that may impact future results. MD&A is provided as a supplement to, and should be read in conjunction with, our Annual Report on Form 10-K
for the year ended December 31, 2024, as amended by Amendment No. 1 on Form 10-K/A (2024 Form 10-K) (including Part I, Item 1A. "Risk Factors"), our financial statements and the accompanying notes to our financial statements.
Business Overview
We provide total talent management services, including strategic workforce solutions, contingent staffing, permanent placement, and consultative services for healthcare customers across the continuum of care, by recruiting and placing highly qualified healthcare professionals in virtually every specialty and area of expertise. In addition to clinical roles such as school nurses, speech language, and behavioral therapists, we place non-clinical professionals such as teachers, substitute teachers, and other education specialties at educational facilities across the nation. Our diverse customer base includes both public and private acute care and non-acute care hospitals, outpatient clinics, ambulatory care facilities, single- and multi-specialty physician practices, rehabilitation facilities, Program of All-Inclusive Care for the Elderly (PACE) programs, urgent care centers, local and national healthcare systems, managed care providers, public and charter schools, correctional facilities, government facilities, pharmacies, and many other healthcare providers. Through our national staffing teams, we offer our workforce solutions and place clinicians on travel and per diem assignments, local short-term contracts, and permanent positions. In addition, we continually evaluate opportunities to acquire companies that would complement or enhance our business, like Workforce Solutions Group, Inc. (WSG) and Mint Medical Physician Staffing, LP and Lotus Medical Staffing LLC (collectively, Mint).
Our workforce solutions include managed service programs (MSPs), vendor management systems (VMS), in-home care services, education health services, recruitment process outsourcing (RPO), project management, and other outsourcing and consultative services as described in Item 1. "Business" in our 2024 Form 10-K. By utilizing the solutions that we offer, customers are able to better plan their personnel needs, optimize their talent acquisition and management processes, strategically flex and balance their workforce, have access to quality healthcare personnel, and provide continuity of care for improved patient outcomes.
The Company's two reportable segments offer services to its customers as described below:
● Nurse and Allied Staffing- Nurse and Allied Staffing represented approximately 82% of total revenue in the second quarter of 2025. The Nurse and Allied Staffing segment provides workforce solutions and traditional staffing, including temporary and permanent placement of travel nurses and allied professionals, as well as per diem and contract nurses and allied personnel. We also provide clinical and non-clinical professionals on short-term and long-term assignments to customers such as local and national healthcare plans, managed care providers, public and charter schools, correctional facilities, skilled nursing facilities, and other non-acute settings. In addition, Nurse and Allied Staffing provides executive search services for healthcare professionals, as well as contingent search. We provide flexible workforce solutions to our healthcare customers through diversified offerings designed to meet their unique needs, including MSP, RPO, and consulting services. We also offer our SaaS-based, proprietary, vendor management technology, Intellify®to facilities to manage all or a portion of their agency services.
● Physician Staffing- Physician Staffing represented approximately 18% of total revenue in the second quarter of 2025. Physician Staffing provides physicians in many specialties, as well as certified registered nurse anesthetists, nurse practitioners, and physician assistants as independent contractors on temporary assignments throughout the United States.
Summary of Operations
For the quarter ended June 30, 2025, consolidated revenue declined 19.3% year-over-year to $274.1 million, as there continued to be a decline in both volume and average bill rates in travel nurse and allied, and per diem. These declines were partly offset by continued growth in Homecare Staffing, which was up 31.3% over the prior year, as well as growth in our Physician Staffing segment, which was up 3.0% over the prior year. Net loss attributable to common stockholders in the second quarter of 2025 was $6.7 million, as compared to net loss of $16.1 million for the same period in the prior year.
For the three months ended June 30, 2025, cash and cash equivalents totaled $81.2 million. Cash flow provided by operating activities for the three months ended June 30, 2025 was$4.2 million. As of June 30, 2025, there were no borrowings drawn under the revolving senior-secured asset-based credit facility (ABL), and borrowing base availability under the ABL was $140.6 million, with $125.7 million of availability net of $14.9 million of letters of credit. See Note 8 - Debt to our condensed consolidated financial statements.
On December 3, 2024, Cross Country entered into an Agreement and Plan of Merger (Merger Agreement) with Aya Holdings II Inc., a Delaware corporation (Parent), Spark Merger Sub One Inc., a Delaware corporation and a wholly owned subsidiary of Parent (Merger Sub), and, solely for purposes of Section 11.14 thereto, Aya Healthcare, Inc. (Aya Healthcare), pursuant to which Merger Sub will merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent (Aya Merger). On February 20, 2025, the Company and Aya Healthcare each received a request for additional information from the U.S. Federal Trade Commission in connection with their review of the transactions contemplated by the Merger Agreement. The Company expects that the Aya Merger will close in the fourth quarter of 2025, subject to the satisfaction of other customary closing conditions, including regulatory approvals. The Aya Merger was approved by the Company's stockholders at a special meeting held on February 28, 2025. Upon completion of the Aya Merger, Cross Country will become a private company and its common stock will no longer trade on Nasdaq. See Note 1 - Organization and Basis of Presentation to our condensed consolidated financial statements.
See Results of Operations, Segment Results, and Liquidity and Capital Resources sections that follow for further information.
Operating Metrics
We evaluate our financial condition by tracking operating metrics and financial results specific to each of our segments. Key operating metrics include hours worked, days filled, number of contract personnel on a full-time equivalent (FTE) basis, revenue per FTE, and revenue per day filled. Other operating metrics include number of open orders, candidate applications, contract bookings, length of assignment, bill and pay rates, renewal and fill rates, number of active searches, and number of placements. These operating metrics are representative of trends that assist management in evaluating business performance. Due to the timing of our business process and other factors, certain of these operating metrics may not necessarily correlate to the reported U.S. GAAP results for the periods presented. Some of the segment financial results analyzed include revenue, operating expenses, and contribution income. In addition, we monitor cash flow, as well as operating and leverage ratios, to help us assess our liquidity needs.
| Business Segment | Business Measurement | ||||
| Nurse and Allied Staffing | FTEs represent the average number of Nurse and Allied Staffing contract personnel on a full-time equivalent basis. | ||||
| Average revenue per FTE per day is calculated by dividing the Nurse and Allied Staffing revenue, excluding permanent placement, per FTE by the number of days worked in the respective periods. | |||||
| Physician Staffing | Days filled is calculated by dividing the total hours invoiced during the period, including an estimate for the impact of accrued revenue, by eight hours. | ||||
| Revenue per day filled is calculated by dividing revenue as reported by days filled for the period presented. | |||||
Results of Operations
The following table summarizes, for the periods indicated, selected condensed consolidated statements of operations and comprehensive loss data expressed as a percentage of revenue. Our historical results of operations are not necessarily indicative of future operating results.
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenue from services | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
| Direct operating expenses | 79.6 | 79.2 | 79.8 | 79.4 | |||||||||||||||||||
| Selling, general and administrative expenses | 18.2 | 17.7 | 18.1 | 17.2 | |||||||||||||||||||
| Credit loss expense | - | 5.6 | - | 2.8 | |||||||||||||||||||
| Depreciation and amortization | 1.5 | 1.4 | 1.6 | 1.3 | |||||||||||||||||||
| Acquisition and integration-related costs | 2.2 | - | 1.4 | - | |||||||||||||||||||
| Restructuring costs | 0.2 | 0.6 | 0.1 | 0.4 | |||||||||||||||||||
| Legal and other losses | 0.4 | 1.2 | 0.2 | 1.1 | |||||||||||||||||||
| Impairment charges | - | - | - | 0.1 | |||||||||||||||||||
| Loss from operations | (2.1) | (5.7) | (1.2) | (2.3) | |||||||||||||||||||
| Interest expense | 0.2 | 0.2 | 0.2 | 0.1 | |||||||||||||||||||
| Interest income | (0.2) | (0.1) | (0.2) | (0.1) | |||||||||||||||||||
| Other income, net | - | - | - | (0.1) | |||||||||||||||||||
| Loss before income taxes | (2.1) | (5.8) | (1.2) | (2.2) | |||||||||||||||||||
| Income tax expense (benefit) | 0.3 | (1.1) | 0.1 | (0.3) | |||||||||||||||||||
| Net loss attributable to common stockholders | (2.4) | % | (4.7) | % | (1.3) | % | (1.9) | % | |||||||||||||||
Comparison of Results for the Three Months Ended June 30, 2025 and the Three Months Ended June 30, 2024
| Three Months Ended June 30, | |||||||||||||||||||||||
| Increase (Decrease) | Increase (Decrease) | ||||||||||||||||||||||
| 2025 | 2024 | $ | % | ||||||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||||||
| Revenue from services | $ | 274,072 | $ | 339,771 | $ | (65,699) | (19.3) | % | |||||||||||||||
| Direct operating expenses | 218,068 | 268,966 | (50,898) | (18.9) | % | ||||||||||||||||||
| Selling, general and administrative expenses | 50,050 | 60,255 | (10,205) | (16.9) | % | ||||||||||||||||||
| Credit loss expense | 30 | 18,858 | (18,828) | (99.8) | % | ||||||||||||||||||
| Depreciation and amortization | 4,101 | 4,719 | (618) | (13.1) | % | ||||||||||||||||||
| Acquisition and integration-related costs | 5,995 | 3 | 5,992 | NM | |||||||||||||||||||
| Restructuring costs | 588 | 2,116 | (1,528) | (72.2) | % | ||||||||||||||||||
| Legal and other losses | 1,099 | 3,946 | (2,847) | (72.1) | % | ||||||||||||||||||
| Impairment charges | - | 114 | (114) | (100.0) | % | ||||||||||||||||||
| Loss from operations | (5,859) | (19,206) | 13,347 | 69.5 | % | ||||||||||||||||||
| Interest expense | 549 | 568 | (19) | (3.3) | % | ||||||||||||||||||
| Interest income | (702) | (235) | (467) | (198.7) | % | ||||||||||||||||||
| Other expense, net | 23 | 23 | - | - | % | ||||||||||||||||||
| Loss before income taxes | (5,729) | (19,562) | 13,833 | 70.7 | % | ||||||||||||||||||
| Income tax expense (benefit) | 930 | (3,512) | 4,442 | 126.5 | % | ||||||||||||||||||
| Net loss attributable to common stockholders | $ | (6,659) | $ | (16,050) | $ | 9,391 | 58.5 | % | |||||||||||||||
NM - Not meaningful
Revenue from services
Revenue from services decreased 19.3% to $274.1 million for the three months ended June 30, 2025, as compared to $339.8 million for the three months ended June 30, 2024, due to volume and bill rate declines in the Nurse and Allied Staffing segment partially offset by higher average bill rates in the Physician Staffing segment. See further discussion in Segment Results.
Direct operating expenses
Direct operating expenses consist primarily of field employee compensation and independent contractor expenses, housing expenses, travel expenses, and related insurance expenses. Direct operating expenses decreased $50.9 million, or 18.9%, to $218.1 million for the three months ended June 30, 2025, as compared to $269.0 million for the three months ended June 30, 2024, as a result of revenue decreases and the tightening of the bill/pay spreads. As a percentage of total revenue, direct operating expenses increased to 79.6%, as compared to 79.2% in the prior year period.
Selling, general and administrative expenses
Selling, general and administrative expenses decreased 16.9% to $50.1 million for the three months ended June 30, 2025, as compared to $60.3 million for the three months ended June 30, 2024,primarily due to decreases in compensation and benefit expense, as well as decreases in professional fees. As a percentage of total revenue, selling, general and administrative expenses increased to 18.2% for the three months ended June 30, 2025, as compared to 17.7% for the three months ended June 30, 2024.
Credit loss expense
Credit loss expense for the three months ended June 30, 2025 was immaterial, as compared to $18.9 million for the three months ended June 30, 2024, which was related to a customer bankruptcy. As a percentage of revenue, credit loss expense was 0.0% for the three months ended June 30, 2025 and 5.6% for the three months ended June 30, 2024.
Depreciation and amortization expense
Depreciation and amortization expense for the three months ended June 30, 2025 was $4.1 million, as compared to $4.7 million for the three months ended June 30, 2024. As a percentage of revenue, depreciation and amortization expense was 1.5% for the three months ended June 30, 2025 and 1.4% for the three months ended June 30, 2024.
Acquisition and integration-related costs
Acquisition and integration-related costs of $6.0 million for the three months ended June 30, 2025 relate primarily to fees associated with the pending Aya Merger. See Note 1 - Organization and Basis of Presentation to our condensed consolidated financial statements. There were no such costs for the three months ended June 30, 2024.
Restructuring costs
Restructuring costs of $0.6 million and $2.1 million for the three months ended June 30, 2025 and 2024, respectively, were primarily comprised of employee termination costs. See Note 2 - Summary of Significant Accounting Policies to our condensed consolidated financial statements.
Legal and other losses
During the second quarter of 2025, the Company recorded $1.1 million in legal fees and settlement charges related to various cases and claims. During the second quarter of 2024, the Company recorded legal and other losses of $3.9 million which included the settlement of a class action lawsuit, as well as costs related to an unrecoverable asset.
Impairment charges
Non-cash impairment charges for the three months ended June 30, 2024 related to real estate restructuring activities. There were no such charges for the three months ended June 30, 2025.
Interest income
Interest income of $0.7 million for the three months ended June 30, 2025 related to higher average cash on hand deposited in interest bearing accounts during the quarter. Interest income was immaterial for the three months ended June 30, 2024.
Income tax expense (benefit)
Income tax expense totaled $0.9 million for the three months ended June 30, 2025, as compared to an income tax benefit of $3.5 million for the three months ended June 30, 2024. The income tax expense for the second quarter of 2025 and the income tax benefit for the second quarter of 2024 were primarily driven by federal and state taxes. The increase in income tax expense was primarily related to an increase in book income. See Note 14 - Income Taxes to our condensed consolidated financial statements.
Comparison of Results for the Six Months Ended June 30, 2025 and the Six Months Ended June 30, 2024
| Six Months Ended June 30, | |||||||||||||||||||||||
| Increase (Decrease) | Increase (Decrease) | ||||||||||||||||||||||
| 2025 | 2024 | $ | % | ||||||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||||||
| Revenue from services | $ | 567,480 | $ | 718,945 | $ | (151,465) | (21.1) | % | |||||||||||||||
| Direct operating expenses | 452,818 | 570,843 | (118,025) | (20.7) | % | ||||||||||||||||||
| Selling, general and administrative expenses | 102,536 | 123,507 | (20,971) | (17.0) | % | ||||||||||||||||||
| Credit loss expense | 65 | 20,148 | (20,083) | (99.7) | % | ||||||||||||||||||
| Depreciation and amortization | 8,873 | 9,361 | (488) | (5.2) | % | ||||||||||||||||||
| Acquisition and integration-related costs | 8,036 | 3 | 8,033 | NM | |||||||||||||||||||
| Restructuring costs | 889 | 3,054 | (2,165) | (70.9) | % | ||||||||||||||||||
| Legal and other losses | 1,099 | 7,596 | (6,497) | (85.5) | % | ||||||||||||||||||
| Impairment charges | - | 718 | (718) | (100.0) | % | ||||||||||||||||||
| Loss from operations | (6,836) | (16,285) | 9,449 | 58.0 | % | ||||||||||||||||||
| Interest expense | 1,092 | 1,030 | 62 | 6.0 | % | ||||||||||||||||||
| Interest income | (1,383) | (408) | (975) | (239.0) | % | ||||||||||||||||||
| Other expense (income), net | 83 | (1,034) | 1,117 | 108.0 | % | ||||||||||||||||||
| Loss before income taxes | (6,628) | (15,873) | 9,245 | 58.2 | % | ||||||||||||||||||
| Income tax expense (benefit) | 521 | (2,515) | 3,036 | 120.7 | % | ||||||||||||||||||
| Net loss attributable to common stockholders | $ | (7,149) | $ | (13,358) | $ | 6,209 | 46.5 | % | |||||||||||||||
NM - Not meaningful
Revenue from services
Revenue from services decreased 21.1% to $567.5 million for the six months ended June 30, 2025, as compared to $718.9 million for the six months ended June 30, 2024, due to volume and bill rate declines in the Nurse and Allied Staffing segment partially offset by higher average bill rates in the Physician Staffing segment. See further discussion in Segment Results.
Direct operating expenses
Direct operating expenses decreased $118.0 million, or 20.7%, to $452.8 million for the six months ended June 30, 2025, as compared to $570.8 million for the six months ended June 30, 2024, as a result of revenue decreases and the tightening of the bill/pay spreads. As a percentage of total revenue, direct operating expenses increased to 79.8%, as compared to 79.4% in the prior year period.
Selling, general and administrative expenses
Selling, general and administrative expenses decreased 17.0% to $102.5 million for the six months ended June 30, 2025, as compared to $123.5 million for the six months ended June 30, 2024,primarily due to decreases in compensation and benefit expense, as well as decreases in professional fees, marketing expense, and software and hardware costs. As a percentage of total revenue, selling, general and administrative expenses increased to 18.1%for the six months ended June 30, 2025, as compared to 17.2%for the six months ended June 30, 2024.
Credit loss expense
Credit loss expense for the six months ended June 30, 2025 was immaterial, as compared to $20.1 million for the six months ended June 30, 2024, which was related to a customer bankruptcy. As a percentage of revenue, credit loss expense was 0.0% for the six months ended June 30, 2025 and 2.8% for the six months ended June 30, 2024.
Depreciation and amortization expense
Depreciation and amortization expense for the six months ended June 30, 2025 was $8.9 million, as compared to $9.4 million for the six months ended June 30, 2024. As a percentage of revenue, depreciation and amortization expense was 1.6% for the six months ended June 30, 2025 and 1.3% for the six months ended June 30, 2024.
Acquisition and integration-related costs
Acquisition and integration-related costs of $8.0 million for the six months ended June 30, 2025 relate primarily to fees associated with the pending Aya Merger. See Note 1 - Organization and Basis of Presentation to our condensed consolidated financial statements. There were no such costs for the six months ended June 30, 2024.
Restructuring costs
Restructuring costs of $0.9 million for the six months ended June 30, 2025 were primarily comprised of employee terminations costs, and costs of $3.1 million for the six months ended June 30, 2024 were primarily comprised of employee termination costs and ongoing lease exit costs. See Note 2 - Summary of Significant Accounting Policies to our condensed consolidated financial statements.
Legal and other losses
During the six months ended June 30, 2025, the Company recorded $1.1 million in legal fees and settlement charges related to various cases and claims. During the six months ended June 30, 2024, the Company recorded legal and other losses of $7.6 million, which included the settlement of a class action lawsuit, as well as costs related to an unrecoverable asset.
Impairment charges
Non-cash impairment charges totaled $0.7 million for the six months ended June 30, 2024 related to real estate restructuring activities. There were no such charges for the six months ended June 30, 2025.
Interest income
Interest income of $1.4 million for the six months ended June 30, 2025 related to higher average cash on hand deposited in interest bearing accounts during the period. Interest income was immaterial for the six months ended June 30, 2024.
Other expense (income), net
For the six months ended June 30, 2024, other income, net included a $0.9 million decrease of the remaining earnout liability related to the Mint acquisition. There were no such adjustments for the six months ended June 30, 2025.
Income tax expense (benefit)
Income tax expense totaled $0.5 million for the six months ended June 30, 2025, as compared to income tax benefit of $2.5 million for the six months ended June 30, 2024. The income tax expense for the first six months of 2025 and the income tax benefit for the first six months of 2024 were primarily driven by federal and state taxes. The increase in income tax expense was primarily related to an increase in book income. See Note 14 - Income Taxes to our condensed consolidated financial statements.
Segment Results
Information on operating segments and a reconciliation to loss from operations for the periods indicated are as follows:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (amounts in thousands) | |||||||||||||||||||||||
| Revenue from services: | |||||||||||||||||||||||
| Nurse and Allied Staffing | $ | 224,305 | $ | 291,451 | $ | 466,596 | $ | 623,637 | |||||||||||||||
| Physician Staffing | 49,767 | 48,320 | 100,884 | 95,308 | |||||||||||||||||||
| $ | 274,072 | $ | 339,771 | $ | 567,480 | $ | 718,945 | ||||||||||||||||
| Contribution income: | |||||||||||||||||||||||
| Nurse and Allied Staffing | $ | 13,887 | $ | 5,820 | $ | 31,131 | $ | 33,003 | |||||||||||||||
| Physician Staffing | 4,577 | 4,033 | 8,606 | 7,171 | |||||||||||||||||||
| 18,464 | 9,853 | 39,737 | 40,174 | ||||||||||||||||||||
| Corporate overhead | 12,540 | 18,161 | 27,676 | 35,727 | |||||||||||||||||||
| Depreciation and amortization | 4,101 | 4,719 | 8,873 | 9,361 | |||||||||||||||||||
| Restructuring costs | 588 | 2,116 | 889 | 3,054 | |||||||||||||||||||
| Legal and other losses | 1,099 | 3,946 | 1,099 | 7,596 | |||||||||||||||||||
| Impairment charges | - | 114 | - | 718 | |||||||||||||||||||
| Acquisition and integration-related costs | 5,995 | 3 | 8,036 | 3 | |||||||||||||||||||
| Loss from operations | $ | (5,859) | $ | (19,206) | $ | (6,836) | $ | (16,285) | |||||||||||||||
See Note 12 - Segment Data to our condensed consolidated financial statements.
Certain statistical data for our business segments for the periods indicated are as follows:
| Three Months Ended | |||||||||||||||||||||||
| June 30, | June 30, | Percent | |||||||||||||||||||||
| 2025 | 2024 | Change | Change | ||||||||||||||||||||
| Nurse and Allied Staffing statistical data: | |||||||||||||||||||||||
| FTEs | 7,035 | 8,415 | (1,380) | (16.4) | % | ||||||||||||||||||
| Average Nurse and Allied Staffing revenue per FTE per day | $ | 348 | $ | 377 | $ | (29) | (7.7) | % | |||||||||||||||
| Physician Staffing statistical data: | |||||||||||||||||||||||
| Days filled | 22,228 | 24,252 | (2,024) | (8.3) | % | ||||||||||||||||||
| Revenue per day filled | $ | 2,239 | $ | 1,992 | $ | 247 | 12.4 | % | |||||||||||||||
| Six Months Ended | |||||||||||||||||||||||
| June 30, | June 30, | Percent | |||||||||||||||||||||
| 2025 | 2024 | Change | Change | ||||||||||||||||||||
| Nurse and Allied Staffing statistical data: | |||||||||||||||||||||||
| FTEs | 7,223 | 8,770 | (1,547) | (17.6) | % | ||||||||||||||||||
| Average Nurse and Allied Staffing revenue per FTE per day | $ | 354 | $ | 388 | $ | (34) | (8.8) | % | |||||||||||||||
| Physician Staffing statistical data: | |||||||||||||||||||||||
| Days filled | 44,920 | 48,037 | (3,117) | (6.5) | % | ||||||||||||||||||
| Revenue per day filled | $ | 2,246 | $ | 1,984 | $ | 262 | 13.2 | % | |||||||||||||||
See definition of Business Measurements under the Operating Metrics section of the MD&A.
Segment Comparison - Three Months Ended June 30, 2025 and Three Months Ended June 30, 2024
Nurse and Allied Staffing
Revenue decreased $67.2 million, or 23.0%, to $224.3 million for the three months ended June 30, 2025, as compared to $291.5 million for the three months ended June 30, 2024, driven primarily by a 16.4% decline in professionals on assignment and, to a lesser extent, a 7.7% normalization in bill rates. However, within the segment Homecare Staffing experienced year-over-year revenue growth of 31.3% and sequential revenue growth of 7.0% for the three months ended June 30, 2025.
Contribution income increased $8.1 million, or 138.6%, to $13.9 million for the three months ended June 30, 2025, as compared to $5.8 million for the three months ended June 30, 2024. As a percentage of segment revenue, contribution income margin increased to 6.2% for the three months ended June 30, 2025, as compared to 2.0% for the three months ended June 30, 2024.
The average number of FTEs on contract during the three months ended June 30, 2025 decreased 16.4% from the three months ended June 30, 2024, primarily due to headcount decline in travel nurse and allied, per diem, and education. The average revenue per FTE per day decreased 7.7%.
Physician Staffing
Revenue increased $1.5 million, or 3.0%, to $49.8 million for the three months ended June 30, 2025, as compared to $48.3 million for the three months ended June 30, 2024, primarily due to the impact from higher rates and favorable specialty mix.
Contribution income increased $0.6 million, or 13.5%, to $4.6 million for the three months ended June 30, 2025, as compared to $4.0 million for the three months ended June 30, 2024. As a percentage of segment revenue, contribution income was 9.2% for the three months ended June 30, 2025, as compared to 8.3% for the three months ended June 30, 2024.
Total days filled for the three months ended June 30, 2025 decreased 8.3% to 22,228, as compared to 24,252 in the prior year. Revenue per day filled was $2,239, as compared with $1,992 in the prior year, due to price increases.
Corporate Overhead
Corporate overhead includes unallocated executive leadership and other centralized corporate functional support costs, such as finance, IT, legal, and human resources, as well as public company expenses and corporate-wide projects. Corporate overhead decreased to $12.5 million for the three months ended June 30, 2025, from $18.2 million for the three months ended June 30, 2024, primarily due to decreases in compensation and benefit expense, and a decrease in professional fees.As a percentage of consolidated revenue, corporate overhead was 4.6% for the three months ended June 30, 2025 and 5.3% for the three months ended June 30, 2024.
Segment Comparison - Six Months Ended June 30, 2025 and Six Months Ended June 30, 2024
Nurse and Allied Staffing
Revenue decreased $157.0 million, or 25.2%, to $466.6 million for the six months ended June 30, 2025, as compared to $623.6 million for the six months ended June 30, 2024, driven primarily by a 17.6% decline in professionals on assignment and, to a lesser extent, an 8.8% normalization in bill rates. However, within the segment Homecare Staffing experienced year-over-year revenue growth of 30.4% for the six months ended June 30, 2025.
Contribution income decreased $1.9 million, or 5.7%, to $31.1 million for the six months ended June 30, 2025, as compared to $33.0 million for the six months ended June 30, 2024. As a percentage of segment revenue, contribution income margin increased to 6.7% for the six months ended June 30, 2025, as compared to 5.3% for the six months ended June 30, 2024.
The average number of FTEs on contract during the six months ended June 30, 2025 decreased 17.6% from the six months ended June 30, 2024, primarily due to headcount decline in travel nurse and allied, per diem, and education. The average revenue per FTE per day decreased 8.8%.
Physician Staffing
Revenue increased $5.6 million, or 5.9%, to $100.9 million for the six months ended June 30, 2025, as compared to $95.3 million for the six months ended June 30, 2024, primarily due to the impact from higher rates and favorable specialty mix.
Contribution income increased $1.4 million, or 20.0%, to $8.6 million for the six months ended June 30, 2025, as compared to $7.2 million for the six months ended June 30, 2024. As a percentage of segment revenue, contribution income was 8.5% for the six months ended June 30, 2025, as compared to 7.5% for the six months ended June 30, 2024.
Total days filled for the six months ended June 30, 2025 decreased 6.5% to 44,920, as compared to 48,037 in the prior year. Revenue per day filled was $2,246, as compared with $1,984 in the prior year, due to price increases.
Corporate Overhead
Corporate overhead decreased to $27.7 million for the six months ended June 30, 2025, from $35.7 million for the six months ended June 30, 2024, primarily due to decreases in compensation and benefit expense, as well as professional fees and software and hardware expense.As a percentage of consolidated revenue, corporate overhead was 4.9% for the six months ended June 30, 2025 and 5.0% for the six months ended June 30, 2024.
Liquidity and Capital Resources
As of June 30, 2025, we reported $81.2 million in cash and cash equivalents, with no borrowings drawn under the ABL. Working capital decreased by $1.7 million to $212.9 million as of June 30, 2025, as compared to $214.6 million as of December 31, 2024, primarily due to a decrease in net receivables and the timing of disbursements. As of June 30, 2025, days'sales outstanding, net of amounts owed to subcontractors, was 58 days, up 4 days year-over-year and up 1 day sequentially. As of June 30, 2025, we did not have any off-balance sheet arrangements.
Operating cash flow constitutes our primary source of liquidity and, historically, has been sufficient to fund working capital, capital expenditures, internal business expansion, and debt service. This includes commitments, both short-term and long-term, of interest expense on our debt and operating lease commitments, and future principal payments on the ABL. We expect to meet our future cash needs from a combination of cash on hand, operating cash flows, and funds available through the ABL. See debt discussion which follows.
On May 1, 2023, the Company's Board of Directors authorized approximately $59.0 million in additional share repurchases, such that, effective for trades made after May 3, 2023, the aggregate amount available for stock repurchases was set at $100.0 million (the Repurchase Program). In the third quarter of 2023, we entered into a Rule 10b5-1 Repurchase Plan to allow for share repurchases during the Company's blackout periods, beginning on January 2, 2024 and effective through November 7, 2024. During the six months ended June 30, 2024, we repurchased and retired a total of 1,290,156 shares of common stock for $21.3 million, at an average price of $16.50 per share. During the six months ended June 30, 2025, we did not repurchase any shares of our common stock, but did pay $0.3 million in excise tax related to previous share repurchases. As of June 30, 2025, we had $40.5 million remaining for share repurchase under the Repurchase Program, subject to certain conditions in the Loan Agreement (as defined below).
Net cash provided by operating activities decreased $78.5 million to $9.9 million for the six months ended June 30, 2025, as compared to $88.4 million for the six months ended June 30, 2024.
Net cash used in investing activities was $3.9 million for the six months ended June 30, 2025, as compared to $5.1 million for the six months ended June 30, 2024, for capital expenditures in both years.
Net cash used in financing activities during the six months ended June 30, 2025 was $6.5 million, as compared to $30.8 million during the six months ended June 30, 2024. During the six months ended June 30, 2025, we used cash to pay $1.8 million for income taxes on share-based compensation, $0.3 million for excise tax related to previous share repurchases, and $4.4 million for contingent consideration. During the six months ended June 30, 2024, we used cash to pay $2.9 million for income taxes on share-based compensation, $21.3 million for share repurchases, and $6.6 million for contingent consideration.
Debt
2019 Asset-Based Loan Agreement
Effective October 25, 2019, the prior senior credit facility entered into in August 2017 was replaced by a $120.0 million asset-based loan agreement (Loan Agreement), which provided for a five-year senior secured revolving credit facility. On June 30, 2020, we amended the Loan Agreement (First Amendment), which increased the current aggregate committed size of the ABL from $120.0 million to $130.0 million. All other terms, conditions, covenants, and pricing of the Loan Agreement remained the same. On March 8, 2021, we amended the Loan Agreement (Second Amendment), which increased the current aggregate committed size of the ABL from $130.0 million to $150.0 million, increased certain borrowing base sub-limits, and decreased both the cash dominion event and financial reporting triggers. On June 8, 2021, we amended the Loan Agreement (Third Amendment), which permitted the incurrence of indebtedness and grant of security as set forth in the Loan Agreement and in accordance with the Intercreditor Agreement, and provides mechanics relating to a transition away from LIBOR as a benchmark interest rate to a replacement alternative benchmark rate or mechanism for loans made in U.S. dollars. On November 18, 2021, we amended the Loan Agreement (Fourth Amendment), whereby the permitted indebtedness (as defined in the Loan Agreement) was increased to $175.0 million. On March 21, 2022, we amended the Loan Agreement (Fifth Amendment), which increased the current aggregate committed size of the ABL from $150.0 million to $300.0 million, extended the credit facility for an additional five years, increased certain borrowing base sub-limits, and provided the option for all or a portion of the borrowings to bear interest at a rate based on the Secured Overnight Financing Rate (SOFR) or Base Rate (as defined in the Loan Agreement), at the election of the borrowers, plus an applicable margin. On September 29, 2023, we amended the Loan Agreement (Sixth Amendment), which changed the minimum fixed charge coverage ratio from a maintenance covenant to a springing covenant based on excess availability. On July 29, 2024, we amended the Loan Agreement (Seventh Amendment), which allows for all share repurchases paid in cash prior to June 30, 2024 and thereafter to be excluded as restricted payments in the fixed charge coverage ratio calculation if there is no revolving ABL balance.
As of June 30, 2025, the interest rate spreads and fees under the ABL were based on SOFR plus 1.85% for the revolving portion of the borrowing base. The Base Rate margin would have been 0.75% for the revolving portion.The SOFR and Base Rate margins are subject to monthly adjustments, pursuant to a pricing matrix based on our excess availability under the revolving credit facility. In addition, the facility is subject to an unused line fee, letter of credit fees, and an administrative fee. Borrowing base availability under the ABL was $140.6 million as of June 30, 2025, with no borrowings drawn and $125.7 million of availability net of $14.9 million of letters of credit. For the three months ended June 30, 2025, the excess availability did not fall below the stated threshold and, as a result, there was no covenant compliance period.
See Note 8 - Debt to our condensed consolidated financial statements.
Critical Accounting Policies and Estimates
Our critical accounting policies and estimates remain consistent with those reported in our 2024 Form 10-K.
Cross Country Healthcare Inc. published this content on August 06, 2025, and is solely responsible for the information contained herein. Distributed via SEC EDGAR on August 06, 2025 at 20:46 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]