AMN Healthcare Reports Q2 2025 Financial Results: Resilient Performance Amid Impairment Charges and Market Challenges
AMN Healthcare Services, a leading provider of comprehensive talent solutions for healthcare organizations across the United States, has reported its financial results for the second quarter of 2025. Despite industry headwinds and a significant non-cash impairment charge, the company delivered results at the higher end of guidance, reflecting operational discipline, strategic focus, and strength in key business segments.
Q2 2025: Performance in Line with Guidance, Profitability Hit by Impairments
Total consolidated revenue for the second quarter stood at $658 million, reflecting an 11% decline compared to the same quarter last year and a 5% drop sequentially. However, revenue landed near the upper end of AMN’s previously issued guidance. Adjusted EBITDA margin exceeded expectations, demonstrating the company’s underlying profitability, even as it reported a GAAP net loss of $116 million, or ($3.02) per diluted share.
The loss was driven by non-cash impairment charges totaling $128 million, or $2.81 per share, related to goodwill and intangible assets. These write-downs do not impact cash flow and stem from broader market conditions affecting valuations. Excluding these charges, AMN posted adjusted diluted earnings per share (EPS) of $0.30, down from $0.98 in Q2 2024, reflecting the softer revenue environment and elevated costs.
Commenting on the results, Cary Grace, President and Chief Executive Officer of AMN Healthcare, emphasized the company’s continued momentum:
“Our second quarter financial performance was solid, and we continue to make progress on our ability to serve all market channels and align with clients as their preferred workforce partner. Third-party rankings have confirmed that AMN is holding market share in a highly competitive market. We believe our enhanced AI and technology-enabled services, broad solution set, and talented team position us to gain share in the future.”
Grace noted that uncertainties in the healthcare policy landscape impacted client decision-making, slowing demand in Q2. However, she added that trends began improving in July, with order volumes stabilizing and assignment extensions picking up.
Segment Performance: Allied Outperforms, Physician and Technology Segments Stable
AMN operates across three core segments—Nurse and Allied Solutions, Physician and Leadership Solutions, and Technology and Workforce Solutions. All segments posted year-over-year revenue declines in the quarter, reflecting broader softness in the healthcare labor market and lingering macroeconomic uncertainty.
Nurse and Allied Solutions
This segment remains AMN’s largest, generating $382 million in revenue during Q2, a 14% year-over-year decrease and an 8% drop from the prior quarter. Within this segment:
- Travel nurse staffing revenue declined by 25% year-over-year and 4% sequentially, highlighting ongoing normalization in demand after pandemic-era highs.
- Allied staffing performed above expectations, with revenue down just 4% year-over-year and only 1% sequentially.
- Labor disruption services contributed $16 million in revenue during the quarter, reflecting AMN’s ability to mobilize staffing during strikes and other emergency events.
Physician and Leadership Solutions
Revenue for this segment totaled $175 million, down 6% from the same period last year and flat sequentially.
- Locum tenens revenue was $143 million, stable year over year and up slightly (1%) from Q1 2025.
- Interim leadership saw revenue decline by 25% from Q2 2024 and 5% from the prior quarter.
- Permanent physician and leadership search was the weakest sub-segment, with revenue down 29% year-over-year and 2% sequentially.
Technology and Workforce Solutions
Revenue in this segment was $102 million, reflecting a 9% year-over-year decline, though flat compared to Q1. This performance reflects diverging trends across subcategories:
- Language services generated $76 million in revenue, up 1% both year-over-year and sequentially.
- Vendor management system (VMS) revenue declined sharply by 31% year-over-year and fell 2% sequentially to $19 million.
The decline in VMS revenue reflects lower staffing volumes processed through the platform. However, AMN’s leadership pointed to the long-term strategic value of its technology offerings, including its widely adopted mobile app.
Strategic Tech Divestiture: Smart Square Sale
In a move to streamline its technology portfolio and deepen strategic partnerships, AMN completed the sale of its Smart Square nurse scheduling software platform in July 2025. The buyer, symplr, acquired the asset for $75 million—comprising $65 million in cash and a $10 million note payable in 18 months.
In conjunction with the sale, AMN and symplr entered a commercial partnership that integrates AMN’s workforce advisory, planning, and analytics services with symplr’s workforce management solutions. This transaction supports AMN’s broader strategy of leveraging partnerships to expand reach and capabilities without taking on additional platform overhead.
From a financial perspective, the Smart Square sale will reduce annualized revenue and adjusted EBITDA by approximately $17 million and $6 million, respectively. The Q3 2025 results will reflect the absence of Smart Square revenues from the Technology segment.
Operational and Financial Highlights
Despite the net loss, AMN delivered strong cash flow from operations totaling $79 million for the quarter. Capital expenditures were modest at $10 million, and the company used the proceeds and cash generation to reduce debt by $80 million. Total debt stood at $920 million at quarter-end, and cash and equivalents were $42 million. AMN’s net leverage ratio improved to 3.3:1, reflecting prudent balance sheet management.
Gross margin for Q2 was 29.8%, down 120 basis points from the prior year but up 110 basis points from Q1 2025. The sequential improvement was attributed to a favorable revenue mix and lower payroll tax expense. However, on a year-over-year basis, margins declined across all business units, reflecting pricing pressure and a more competitive labor environment.
Selling, General & Administrative (SG&A) expenses were $155 million, or 23.5% of revenue, compared to $149 million (20.1%) in Q2 2024. The increase was driven largely by a professional liability insurance actuarial adjustment, which was unfavorable this year versus a favorable adjustment in the prior-year quarter.
Loss from operations totaled ($124 million), translating to an operating margin of (18.8%), versus income of $38 million (5.1%) in Q2 2024. Adjusted EBITDA for the quarter was $58 million, down 38% year-over-year, with an adjusted EBITDA margin of 8.9%—a 380-basis-point contraction from the year-ago period.
Q3 2025 : Revenue Pressures Persist, but Market Stabilization Seen
Looking ahead, AMN expects third-quarter revenue to decline 9-11% year-over-year and 5-7% sequentially, reflecting continued weakness in the travel nurse market and reduced contribution from the Smart Square divestiture.
Segment-specific guidance includes:
- Nurse and Allied Solutions: Revenue expected to decline 11-14% year-over-year.
- Physician and Leadership Solutions: Projected to fall 2-4% compared to Q3 2024.
- Technology and Workforce Solutions: Revenue expected to decline 12-14% year-over-year, reflecting the absence of Smart Square.
Labor disruption revenue is expected to contribute approximately $5 million in Q3.
Other guidance metrics include:
- Depreciation: $17 million
- Depreciation in cost of revenue: $2 million
- Non-cash amortization expense: $21 million
- Share-based compensation: $7.5 million
- Integration and other expenses: $2.5 million
- Interest expense: $10.5 million
- Adjusted tax rate: 28%
- Diluted share count: 38.7 million
Importantly, AMN anticipates a $40 million gain on the sale of Smart Square, which will be recognized in Q3 operating income.
Strategic Positioning Amid Uncertainty
While the Q2 results reflect pressures across AMN’s core business lines, the company continues to hold market share and strengthen its position as a strategic partner to healthcare providers. With over 300,000 users now on AMN Passport, its mobile platform for clinicians, the company is doubling down on digital engagement, automation, and efficiency.
In closing remarks, CEO Cary Grace expressed confidence in AMN’s long-term positioning:
We are seeing the early signs of recovery, and our diversified offerings, combined with AI-driven services and strong client partnerships, set us up to emerge stronger from the current environment.”
As AMN navigates a changing healthcare staffing landscape, its strategic initiatives, disciplined cost management, and focus on technology-enabled solutions are expected to remain central to its growth trajectory.
