AMN Healthcare Reports Strong Q1 2025 Results with Revenue and Earnings Surpassing Expectations
AMN Healthcare Services, Inc. (NYSE: AMN), a leading innovator in total talent solutions for healthcare organizations across the U.S., today reported its financial results for the first quarter of 2025. Despite ongoing industry normalization and broader macroeconomic headwinds, the company exceeded the high end of its revenue and earnings guidance, showcasing resilience across key business segments and continued momentum in its tech-enabled services.
Business Highlights Reflecting Strategic Progress
The first quarter of 2025 demonstrated AMN Healthcare’s agility and adaptability in a dynamic environment. Total revenue for the quarter reached $690 million, outperforming internal expectations. This upside was driven by better-than-expected performance in labor disruption staffing, locum tenens, and allied health services. Other business areas remained in line with forecasts, contributing to a strong overall performance.
Consolidated gross margin outpaced expectations due to favorable revenue mix and disciplined cost control, while effective management of selling, general, and administrative (SG&A) expenses delivered further operating leverage. Strategic investments in workforce technology and process enhancements contributed to improved client satisfaction and operational efficiency, notably increasing bookings in the locum tenens segment.
A significant acknowledgment of AMN’s innovative approach came through its inclusion in Modern Healthcare’s 2025 Innovators Awards. The company received recognition for its WorkWise workforce technology suite and the AMN Passport mobile career platform, both of which are transforming the way healthcare professionals engage with employers and manage their careers.
Another major milestone was strong cash generation from operations, totaling $93 million in Q1. This robust cash flow enabled the company to pay down $60 million in debt, improving its net leverage ratio to 3.1:1 as of March 31, 2025.
“Our performance in the first quarter of 2025 reflects solid execution and continued progress on our long-term strategic priorities,” said Cary Grace, President and Chief Executive Officer of AMN Healthcare. “We are encouraged by the ongoing recovery in patient volumes and the increasing adoption of our technology-driven workforce solutions. While clients remain cautious due to economic uncertainty, healthcare legislation, and tariff considerations, our diversified business model positions us well to capture additional market share over time.”
Q1 2025 Financial Summary: Resilience Amid Market Headwinds
Consolidated Financial Performance
- Total revenue was $690 million for Q1 2025, representing a 16% decline compared to Q1 2024 and a 6% drop from the previous quarter. Despite the year-over-year decrease, revenue exceeded guidance expectations due to strong performance in targeted areas.
- Net loss for the quarter was $1 million, or ($0.03) per diluted share, compared with net income of $17 million ($0.45 per diluted share) in Q1 2024. This shift reflects ongoing normalization in demand across the staffing industry and planned investments in innovation and platform enhancements.
- Adjusted diluted EPS stood at $0.45, down from $0.97 in the year-ago period.
- Gross margin for the quarter was 28.7%, down 270 basis points year over year and 110 basis points sequentially. While each of the three business segments saw margin pressure, the consolidated figure benefited partially from a favorable mix shift toward higher-margin services.
Segment-Level Performance
- Nurse and Allied Solutions
- Revenue from this segment totaled $413 million, reflecting a 20% year-over-year decline and a 9% sequential decrease.
- Travel nurse staffing revenue was particularly affected, dropping 36% year over year and 6% from the prior quarter.
- The Allied division posted a 13% year-over-year revenue decrease and a modest 1% decline sequentially.
- Notably, labor disruption events contributed $39 million to revenue during the quarter, highlighting AMN’s ability to mobilize quickly during critical staffing needs.
- Physician and Leadership Solutions
- Segment revenue came in at $174 million, down 8% compared to Q1 2024 but showing sequential growth of 1%.
- The locum tenens business generated $141 million, reflecting a 3% year-over-year decline but a healthy 3% sequential increase, supported by stronger bookings.
- Interim leadership revenue declined 21% year over year and 9% from the prior quarter.
- The permanent physician and executive search segment saw a 29% year-over-year decrease and an 8% sequential drop, consistent with broader market softness in leadership recruitment.
- Technology and Workforce Solutions
- This segment posted $102 million in revenue, down 9% from the same quarter last year and 4% sequentially.
- Language services stood out as a bright spot, generating $75 million in revenue—a 5% year-over-year increase despite a 2% sequential dip.
- Vendor management systems (VMS) revenue was $19 million, declining sharply by 33% year over year and 14% from the previous quarter, reflecting both client consolidation and increased pricing pressures.
Expense Management and Profitability
- SG&A expenses totaled $148 million, or 21.4% of revenue, down from $175 million (21.3% of revenue) in the same quarter last year. The reduction was driven by lower employee-related costs, professional services, and improved collections reducing bad debt.
- Compared to Q4 2024, SG&A costs also declined from $159 million (21.6% of revenue), reinforcing AMN’s commitment to cost discipline.
- Operating income was $13 million, yielding an operating margin of 1.8%, compared with $40 million and a 4.9% margin in the prior-year quarter.
- Adjusted EBITDA was $64 million, representing a 34% decline from the year-ago period. The adjusted EBITDA margin fell to 9.3%, down 260 basis points year over year.
Q2 2025 Guidance and Strategic Priorities
For the second quarter of 2025, AMN Healthcare expects total revenue to be 11% to 13% lower than the same period in 2024 and 4% to 7% lower sequentially. This outlook reflects continued industry normalization and cautious client spending, especially in the nurse staffing and technology segments.
- Nurse and Allied Solutions revenue is expected to decline 14% to 17% year over year.
- Physician and Leadership Solutions revenue is projected to be 5% to 7% lower than Q2 2024.
- Technology and Workforce Solutions is forecasted to decline 8% to 10% year over year.
- The company anticipates $16 million in labor disruption-related revenue during Q2.
Other financial assumptions for Q2 2025 include:
- Depreciation and amortization: $19 million and $2 million (cost of revenue), respectively.
- Non-cash amortization expense: $20 million.
- Share-based compensation: $11 million.
- Integration and other expenses: $3 million.
- Interest expense: $11.5 million.
- Adjusted tax rate: 28%.
- Diluted average shares outstanding: 38.6 million.
AMN Healthcare’s Q1 2025 performance reflects a balanced combination of operational discipline, strategic investment in innovation, and responsiveness to client needs. As the healthcare staffing industry continues to stabilize post-pandemic, AMN’s diversified portfolio, technology leadership, and disciplined execution provide a solid foundation for long-term value creation.
Despite ongoing challenges in travel nursing and executive search, the company’s growing traction in locum tenens and language services, coupled with robust free cash flow and debt reduction, positions AMN to navigate uncertainty while continuing to invest in high-growth areas.
