AMN Healthcare Services, Inc. Q2 FY2026 earnings call

• Overall Financial Performance
  • Consolidated Q2 2026 revenue was $673 million, 2% higher year-over-year and 6% above the high end of prior guidance. Adjusted EBITDA was $73 million (10.9% of revenue), up 26% year-over-year, and adjusted EPS was $0.77, compared to $0.30 in the year-ago quarter.
  • Non-recurring favorable items added ~$27 million to revenue, 290 bps to consolidated gross margin, and 370 bps to adjusted EBITDA margin; excluding these items, revenue was still nearly 2% above guidance, and EBITDA margin hit the top of the prior guidance range.
  • The company ended the quarter with $362 million in cash and equivalents, total debt of $750 million, and a leverage ratio of 1.5x per its credit agreement.

1. Nurse and Allied Solutions: Q2 2026 segment revenue was $422 million, growing 11% year-over-year, and representing 62.7% of total consolidated revenue. Segment gross margin was 28.4%, and segment operating margin was 13.8%. Travel nurse volume grew 6% year-over-year, allied volume grew 7% year-over-year, and international nurse revenue grew 23% year-over-year. 2. Physician and Leadership Solutions: Q2 2026 segment revenue was $165 million, down 6% year-over-year, and representing 24.5% of total consolidated revenue. Segment gross margin was 26.5%. Locum tenens revenue was $131 million, down 8% year-over-year; interim leadership revenue was $22 million, down 3% year-over-year; the search business delivered 27% year-over-year revenue growth. 3. Technology and Workforce Solutions: Q2 2026 segment revenue was $87 million, down 15% year-over-year (down 11% excluding the SmartSquare divestiture), and representing 12.9% of total consolidated revenue. Segment gross margin was 48.6%. VMS business revenue was $15 million in the quarter.

• Consolidated third quarter 2026 revenue is guided to a range of $640 to $655 million, with gross margin expected between 27% and 27.5%, adjusted EBITDA margin expected between 6.5% and 7%.
• Nurse and Allied Solutions third quarter revenue is expected to grow 9% to 11% year-over-year, with more than 10% year-over-year volume growth projected for both travel nurse and allied lines.
• Physician and Leadership Solutions third quarter revenue is projected to be down 5% to 7% year-over-year.
• Technology and Workforce Solutions third quarter revenue is estimated to be down 11% to 13% year-over-year.
• For 2027, management expects the Physician and Leadership segment to return to year-over-year growth, with double-digit year-over-year growth projected for the search business, and growth returning for the interim leadership line. International nurse growth for 2027 is currently expected to be in the single-digit range, down from prior higher expectations. VMS revenue is expected to stabilize at current levels in H2 2026, with prospects for sequential growth in 2027.

• Embassy appointment backlogs for international nurse visa applicants are lower than expected, limiting 2027 growth for the international nurse business relative to prior projections.
• Sustained pricing pressure in language services (part of Technology and Workforce Solutions) is expected to continue through the rest of 2026, with 8% year-over-year pricing compression recorded in Q2.
• The Kaiser contract RFP process is competitive, creating uncertainty around contract retention and final terms for this large client.
• Locum tenens growth is constrained by slow fill rate improvement in competitive vendor-neutral third-party channels, with transformation of the business expected to deliver results only in 2027.
• While current demand growth is accelerating, sustained bill rate increases are not yet observed, and high industry competition may delay or limit future rate increases even if demand remains strong.

Q: The premium of contingent labor rates over permanent staff is at historic lows. What is the current premium, and how does current contingent labor penetration compare to pre-COVID levels? / A: Pre-COVID, the contingent premium was mid-to-high teens; it peaked at 100% during COVID, and is now in the mid-to-high single digits, with some markets even lower. Overall contingent utilization across clients is currently at or slightly below pre-COVID levels, with wide variation across client locations and organizations.

Q: With accelerating demand for Nurse and Allied, is the pickup broad-based, and is AMN benefiting from market share gains amid competitor disruption? / A: Demand growth is fully broad-based across regions, provider sizes, and service models including MSP, vendor-neutral, and third-party channels. AMN is benefiting from both broad underlying market demand growth and market share gains: higher fill rates in competitive third-party channels indicate share capture, driven by AMN's multi-year investments in process automation and AI.

Q: If current demand growth persists, when would you expect bill rates to rise, and can you sustain volume growth without near-term rate increases? / A: Historically, there is a lag between sustained demand increases and bill rate hikes. Currently, bill rates are stable overall with only isolated small increases. If demand remains strong through the winter season, broad rate increases are expected over time, though high industry competition may delay this. AMN can sustain current growth at current rates for the remainder of 2026, but some natural rate increases would be expected entering 2027.

Q: What is your update on the Kaiser permanent RFP process, and how would you characterize your positioning? / A: The Kaiser contract ends in late 2026, and the client is now in its expected RFP process as part of normal governance. The process will be competitive, but AMN has a longstanding strong relationship with Kaiser and a track record of strong program performance, leaving it well positioned. As expected in any RFP, Kaiser is seeking improved terms, and AMN's current contract terms are already aligned with current market levels.