AMN HEALTHCARE SERVICES Q2 FY26 earnings call AMN

AMN Healthcare reported consolidated revenue of $673 million for Q2 FY26, surpassing the high end of its guidance range by 6% and representing a 2% year-over-year increase. Adjusted EBITDA reached $73 million, up 26% year-over-year, with an adjusted EBITDA margin of 10.9%. Adjusted EPS came in at $0.77, a significant increase from $0.30 in the prior year quarter. These results included approximately $27 million in non-recurring^📎 revenue and a 370 basis point benefit to adjusted EBITDA margin from billing accrual true-up^📎s and reserve reversals.

The Nurse and Allied Solutions segment was a primary driver of the strong performance, with revenue of $422 million, growing 11% year-over-year and exceeding consensus estimates by 12%. Travel nurse volume increased 6% year-over-year, and Allied volume grew 7% year-over-year, marking the highest growth rates for these businesses in four years. Demand acceleration continued into Q3, with travel nurse orders up 40% year-over-year in early August and Allied orders showing mid-teens growth in June and July. International nurse revenue also contributed with 23% year-over-year growth.

The Physician and Leadership Solutions segment reported revenue of $165 million, a 6% decrease year-over-year, aligning with guidance. While locum tenens revenue declined 8% year-over-year to $131 million, impacted by a $2 million negative sales adjustment, the search business showed a positive inflection. Physician search new searches grew 37% sequentially and 40% year-over-year, and executive search saw a 30% year-over-year increase in new searches. Interim leadership revenue was down 3% year-over-year but new searches are building.

Technology and Workforce Solutions segment revenue was $87 million, down 15% year-over-year, or 11% excluding the SmartSquare divestiture. Language services revenue was down 8% to $70 million, with pricing experiencing an 8% year-over-year compression, though volume remained flat. VMS revenue was $15 million, down 20% from a year ago. The company is implementing a shared service strategy and workforce globalization to stabilize margins and rolling out lower-cost service tiers to compete more broadly.

AMN Healthcare completed two small, strategic acquisitions totaling $3 million: Jaide Health, an AI-enabled language interpretation service, and ESSENTIAL Brand Leadership Assessment, a leadership selection solution. These acquisitions aim to extend capabilities and enhance client offerings. The company ended the quarter with a strong balance sheet, holding $362 million in cash and equivalents and a leverage ratio of 1.5x, positioning it for potential market consolidation and further strategic investments. Modest share repurchases of 85,000 shares were executed at an average price of $26.33.

The company continues to invest in process automation, 24/7 business operations, and AI enablement across its recruiting processes. Enhancements were introduced to the WorkWise labor force management platform, including dashboards with supplier performance and third-party bill and pay rate intelligence. The Passport app, a market-leading clinician platform, also saw enhancements, including AI-enabled search, leading to a 33% year-over-year increase in users to over 400,000 and a 50% increase in monthly active users.

Management highlighted that contingent labor rates are at historically low premiums (mid-to-high single digits) compared to permanent staff, making flexible labor an attractive solution for clients facing increasing patient demand. This dynamic, combined with a slowdown in permanent hiring and normalized retention rates post-COVID, is contributing to the pickup in demand. The company anticipates sustained demand increases, especially with upcoming winter orders, and is executing well with high fill rates across its platforms.