Q4 2023 AMN Healthcare Services Inc Earnings Call

Okay.

Operator: Good day, and thank you for standing by. Welcome to AMN Healthcare's fourth quarter and full year 2023 earnings conference call. At this time, all participants are in a listen-only mode.

Speaker Change: Good day, and thank you for standing by and welcome to M N Healthcare's fourth quarter and full year 2023 earnings conference call.

Speaker Change: At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During the session you will need to press star one on your telephone you will then hear an automated message advising your hand. This race to withdraw your question. Please press star one again, please be advised that today's conference is being recorded I would now like to hand.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star one on your telephone. You will then hear an automated message advising that your hand is raised.

Operator: To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our speaker today, Randall Reese, Senior Director of Investor Relations. Please go ahead.

Speaker Change: The conference over to your Speaker today, Randle Reece Senior director of Investor Relations. Please go ahead.

Randle Glenn Reece: Good afternoon, everyone. Welcome to AMN Healthcare's fourth quarter and full year 2023 earnings call. A replay of this webcast will be available at ir.amnhealthcare.com at the conclusion of this call. Various remarks we make during this call about future expectations, projections, trends, plans, events, or circumstances constitute forward-looking statements. These statements reflect the company's current beliefs based upon information currently available to it. Our actual results may differ materially from those indicated by these forward-looking statements because of various factors and cautionary statements, including those identified in our most recently filed Forms 10-K and 10-Q, our earnings release, and subsequent filings with the SEC. The company does not intend to update guidance or any forward-looking statements provided today prior to its next earnings release.

Randle Glenn Reece: Good afternoon, everyone welcome to am and healthcare fourth quarter and full year 2023 earnings call.

Randle Reece: A replay of this webcast will be available at IR Dot AAM in health care Dot com at the conclusion of this call.

Randle Reece: Various remarks, we make during this call about future expectations projections trends plans events or circumstances constitute forward looking statements.

Randle Reece: Statements reflect the company's current beliefs based upon information currently available to it.

Randle Reece: Our actual results may differ materially from those indicated by these forward looking statements because of various factors and cautionary statements, including those identified in our most recently filed forms 10-K and 10-Q.

Randle Reece: Our earnings release, and subsequent filings with the SEC.

Randle Reece: The company does not intend to update guidance or any forward looking statements provided today prior to its next earnings release.

Randle Glenn Reece: This call contains certain non-GAAP financial information. Information regarding and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release and on our financial reports page at ir.amnhealthcare.com. On the call today are Cary Grace, President and Chief Executive Officer, and Jeff Knudson, Chief Financial Officer. I will now turn the call over to Cary. Thank you, Randy.

Randle Reece: This call contains certain non-GAAP financial information.

Randle Reece: Information regarding and reconciliations of these non-GAAP measures.

Randle Reece: Most directly comparable GAAP measures are included in our earnings release and on our financial reports page at IR Dot a M in health care Dot com.

Randle Reece: On the call today are Kerry graves, President and Chief Executive Officer, and Jeff Knudson, Chief Financial Officer, I will now turn the call over to Kerry.

Cary Grace: AMN Healthcare finished 2023 with a solid fourth quarter and a stabilizing outlook for the first quarter of the new year. Last year, we successfully balanced two objectives. We are working through the largest cyclical reset in industry history, partnering with clients to help them optimize their workforce mix to meet their strategic and financial objectives. At the same time, we have positioned AMN for stronger growth in technology-centric total talent solutions for healthcare. Throughout the history of our company, AMN has excelled at innovating to support healthcare professionals and clients during changing times. In 2023, we saw our team members pull together to transform AMN as clients' needs shifted during the pandemic. While we navigated a declining staffing market, AMN initiated a wide-ranging series of initiatives to accelerate our agility and align our value proposition with the increasing need for innovative solutions to solve significant healthcare workforce challenges.

Kerry Graves: Thank you Randy.

Kerry Graves: <unk> healthcare finished 2023 with a solid fourth quarter and a stabilizing outlook for the first quarter of the new year.

Kerry Graves: Last year, we successfully balanced two objectives.

Kerry Graves: We worked through the largest cyclical reset in industry history partnering with clients to help them optimize their workforce next to meet their strategic and financial objectives.

Kerry Graves: At the same time, we positioned and then for stronger growth in technology centric total talent solutions for health care.

Kerry Graves: Throughout the history of our company.

Kerry Graves: A man has excelled at innovating to support health care professionals and clients.

Kerry Graves: During changing time.

Kerry Graves: In 2023 Star team members altogether to transform a M N as client needs shifted during the pandemic.

Kerry Graves: While we navigate.

Kerry Graves: Obligated or declining staffing market.

Kerry Graves: <unk> initiated a wide ranging series of initiatives to accelerate our agility and align our value proposition with the increasing need for innovative solutions to solve significant health care workforce challenges.

Cary Grace: From the beginning, our strategy has been guided by four pillars: be the preferred partner to help healthcare organizations optimize their workforce strategy, be the preferred employer for healthcare professionals and team members, build on and digitize our unmatched portfolio of total talent solutions for healthcare, and be good stewards of capital, investing prudently for the short and long term. We're in the middle of last year.

Kerry Graves: From the beginning our strategy has been guided by four pillars.

Kerry Graves: Be the preferred partner to help healthcare organizations optimize their workforce strategy.

Kerry Graves: Either preferred employer for health care professionals and team members.

Kerry Graves: Build on and digitize, our unmatched portfolio of total talent solutions for health care.

Kerry Graves: And be good stewards of capital investing prudently for the short and long term.

Kerry Graves: Okay.

Kerry Graves: We're in the middle of last year, we were just getting started adapting to market changes and developing our operational plan for growth.

Cary Grace: We were just getting started adapting to market changes and developing our operational plan for growth. I am now pleased to report that AMN has made progress on all these objectives. We made ourselves a better partner and elevated our total talent solution by moving to integrate our solutions, our system, and our brand, going to market truly as one AMN. In addition, we restarted our sales organization to pursue growth opportunities in all segments of our market. As healthcare leaders made workforce management a top strategic priority, we developed the flexibility to deliver a comprehensive range of solutions through our technology platform. We took the best new technology and made our services more powerful, easier to use, and faster to deploy.

Kerry Graves: I am now pleased to report the Amgen has made progress on all these objectives.

Kerry Graves: We made ourselves a better partner and elevated our total talent solution by moving to integrate our solution our system and our brand.

Kerry Graves: Going to market truly is one a M.

Kerry Graves: In addition, we restarted our sales organization to pursue growth opportunities in all segments of our market.

Kerry Graves: As health care leaders made workforce management, a top strategic priority redevelop the flexibility to deliver a comprehensive range of solutions through our technology platform.

Kerry Graves: We took the best new technology and made our services more powerful easier to use and faster to deploy.

Cary Grace: We have the breadth and depth of solutions to serve clients in any model they choose, ranging from direct staffing to vendor neutral and master vendor MSP to recruiting solutions and workforce management technology or a hybrid of models. Our ability to broadly serve the market is enabling us to grow our sales pipeline across all services. Becoming more agile meant speeding up the pace of IT and operational transformation at AMS.

Kerry Graves: We have the breadth and depth of solutions to serve clients in any model they choose <unk>.

Kerry Graves: <unk> from direct staffing to vendor neutral and master vendor MSP to recruiting solutions and workforce management technology or a hybrid model.

Kerry Graves: Our ability to broadly serve the market is enabling us to grow our sales pipeline across all service lines.

Kerry Graves: Becoming more agile met speeding up the pace of IP and operational transformation at Amgen and we've completed some of the largest improvement projects in company history.

Cary Grace: And we have completed some of the largest improvement projects in company history. These included moving nine nursing allies and three physician and leadership brands under the AMN Healthcare brand and into one AMN front door for healthcare professionals, important milestones for getting the benefit of operating as a total talent solutions organization. Brand recognition for AMN is already at an all-time high, and candidate traffic and applicants have outpaced expectations. This quarter, we are on track to move Nurse and Allied to the new cloud version of our proprietary front-end platform. Last quarter was the debut of ShiftWise Flex, the cloud-enabled version of our industry-leading VMS software, which we also have extended to a mobile app, enabling on-the-go workforce management. SysWise Flex has an embedded market insights and analytics dashboard available as a standard feature.

Kerry Graves: These included moving nine nursing Allied and three physician and leadership brands under the <unk> healthcare brand.

Kerry Graves: Into one and then front door for health care professionals.

Important milestones for getting the benefit of operating as a total talent solutions organization.

Kerry Graves: Brand recognition for Amgen is already testing at an all time high.

Kerry Graves: Candidate traffic, an applicant has outpaced expectations.

Kerry Graves: This quarter, we are on track to move nurse and Allied to the new cloud version of our proprietary front end platform.

Kerry Graves: Last quarter was the debut of shift towards the cloud enabled version of our industry, leading Vms software, which we also have extended to a mobile app, enabling anago workforce management.

Kerry Graves: <unk> has an embedded market insights and analytics dashboard available as a standard feature.

Cary Grace: Addressing the critical need for actionable, transparent market intelligence, this solution provides our MSP and VMS customers with daily updates on clinical labor trends and market rates, supporting informed decision-making and strategic planning. We are also deploying embedded market rate analytics that can project bill rates at the work order level as far as 90 days. Our investments in ShiftWise Flex are being validated by the broader market reception and competitive renewals with our existing VMS relationships. We are deploying ShiftWise Flex to current clients and new MSP clients as well. And we have completed API integrations with client systems to automate work order entry, clinician onboarding and offboarding, timekeeping, and invoicing. These changes at AMN have strengthened our ability to serve healthcare. One AMN branding is an important element of how we support an increasing number of workers through our industry-leading AMN Passport mobile app. Passport has expanded from its start in nursing to encompass allies and, soon, physicians and advanced practice. AMN Passport now features AI-driven enhancements to our proprietary matching algorithm.

Kerry Graves: Addressing the critical need for actionable transparent market intelligence the solution.

Kerry Graves: Provides our MSP and Vms customers with daily updates on clinical labor trends and market rate supporting informed decision, making and strategic planning.

Kerry Graves: We also are deploying embedded market rate analytics that can projected fill rate at the work order level as far as 90 days out.

Kerry Graves: Our investment and shift white flags are being validated by the broader market reception and competitive renewals with our existing BMS relationship.

Kerry Graves: We are deploying shipped twice flex the current client.

Kerry Graves: New MSP clients as well.

Kerry Graves: And we have completed API integrations with client system.

Kerry Graves: Automated work order entry condition, onboarding and off boarding timekeeping and invoicing.

Kerry Graves: These changes at Amgen has strengthened our ability to serve health care professional.

Kerry Graves: One <unk> branding is an important element of how we support an increasing number of workers through our industry, leading <unk> passport mobile app.

Kerry Graves: Export has expanded from it start in nursing to encompass ally and soon physicians and advanced practices.

Kerry Graves: And then passport now features AI driven enhancements to our proprietary matching algorithms.

Cary Grace: Clinicians receive opportunities that best match their skills and preferences, and they can book them, further personalizing and optimizing their passport experience. AMN Passport has become an important tool for engaging the workforce, enabling self-service, and giving professionals an always-on connection to AMN. Our development work is making it easier for professionals to find the career options they want and manage not just their assignments, but their careers. AMN Passport and ShiftWise Flex are also central to our powerful solution that enables clients to manage internal resource pools, internal agencies, and direct sources. The Passport to Claim Clinician Experience is essential for clients to attract the best people at the best cost in less time. Our change initiatives have also provided exciting opportunities for our corporate team members.

Clinicians receive opportunities that best match their skills and preferences and they can book for themselves further personalizing and optimizing their passport experience.

Kerry Graves: <unk> passport has become an important tool for engaging the workforce, enabling self service and giving professionals an always on connection to Aman.

Kerry Graves: Our development work is making it easier for professionals to find the career options they want.

Kerry Graves: And then it's not just their assignment but their careers.

Kerry Graves: <unk> passport and shift reflects.

Kerry Graves: Are also central to our powerful solution that enables clients to manage internal resource pools internal agencies and direct sourcing.

Kerry Graves: Passport the claim clinician experience is essential for clients to attract the best people at the best cost and less time.

Kerry Graves: Our change initiatives also have provided exciting opportunities for our corporate team members.

Cary Grace: We have automated labor-intensive tasks and enabled around-the-clock credentialing, allowing our team members to be more productive and focus on higher impact activities, such as time with clients and clinics. Our team receives the valuable experience of working with the latest technology. And our entire go-to-market has been reshaped to be more customer-friendly and efficient, which will empower our team members to make even a bigger difference in the continuum of. As proof points, our team member engagement scores last year ranked at the top of our industry and above the Gallup benchmark for best practice organizations. We improve team member retention. Becker's named AMN one of the best health care places to work, and we are recognized by numerous organizations for our strong culture of inclusion and diversity.

Kerry Graves: We have automated labor intensive tasks and enabled around the clock credentialing, bringing our team members to be more productive and focus on higher impact activities, such as time with clients and clinicians.

Kerry Graves: Our team received the valuable experience of working with the latest technology.

Kerry Graves: And our entire go to market has been reshaped to be more customer friendly and efficient, which will empower our team members to make even a bigger difference in the continuum of care.

Kerry Graves: As proof point, our team member engagement scores last year ranked at the top of our industry and above the Gallup benchmark for best practice organization.

Kerry Graves: We improved team member retention Becker's named <unk>, one of the best Health care places to work and we are recognized by numerous organizations for our strong culture of inclusion and diversity.

Cary Grace: Along with what I have noted, we have reinforced our total talent solutions in other ways. Our 1AMN brand consolidation is only part of the heavy lifting that we have done to integrate the sales and delivery of our solution, simplifying and speeding service to new and existing customers. On the front end, we have built on our 39 years of experience to provide advisory services under the leadership of Chief Business Officer Meredith LaPointe and Chief Growth Officer Pat McCoy. And last quarter, we acquired MSDR to expand our scale and diversification in locum tenor. This acquisition was our first major deal since 2020 and a large part of the investments we made last year. AMN generated $372 million of operating cash flow in 2023, enabling us to invest a record high of $104 million in capital expenditures. We also used our strong balance sheet to repurchase $425 million of our stock, which we continue to view as an attractive investment opportunity.

Kerry Graves: Along with what I have noted we have reinforced our total talent solutions in other ways.

Kerry Graves: Our <unk> brand consolidation is only part of the heavy lifting that we have done to integrate the sales and delivery of our solutions.

Kerry Graves: Simplifying and speeding service to new and existing clients.

Kerry Graves: On the front end, we have built on our 39 years of experience to provide advisory services under the leadership of Chief business Officer, Meredith Lapointe, and Chief growth Officer, Pat Nicole.

And last quarter, we acquired <unk> to expand our scale and diversification and locum tenants.

Kerry Graves: This acquisition was our first major deals since 2020.

Kerry Graves: A large part of the investments we made last year.

Kerry Graves: <unk> generated $372 million of operating cash flow in 2023.

Kerry Graves: Enabling us to invest a record high $104 million and capital expenditures.

Kerry Graves: We also used our strong balance sheet to repurchase $425 million of our stock, which we continue to view as an attractive investment opportunity.

Cary Grace: Early in 2024, we see a mixed picture in our market. Our allied staffing business expects sequential revenue growth in the first quarter. Interim Leadership and Search show signs of stabilization and a sense of reaching the bottom.

Kerry Graves: Early in 2024, we see a mixed picture in our markets.

Kerry Graves: Our allied staffing business expect sequential revenue growth in the first quarter.

Kerry Graves: Interim leadership and search share.

Kerry Graves: Signs of stabilization and a sense of reaching the bottom.

Cary Grace: Our sales pipeline continues to both grow and progress, and recent new client wins in staffing include the largest win we have seen since 2019. In the direct and third-party staffing market, we have early signs that our technology and process changes are making us more competitive across the entirety of the market. We continue to expect organic growth in a solid market for locum tenens. And with our recent acquisition of MSDR, our annualized revenue run rate for locums is now more than $600 million. Language Services continues to be one of our strongest growing businesses with its strongest pipeline of processes.

Kerry Graves: Our sales pipeline continues to both grow and progress.

Kerry Graves: And recent new client wins and staffing include the largest win we have seen since 2019.

Kerry Graves: In the direct and third party staffing market, we have early signs that our technology and process changes are making us more competitive across the entirety of the market.

Kerry Graves: We continue to expect organic growth and a solid market for locum tenants.

Kerry Graves: And with our recent acquisition of <unk>, our annualized revenue run rate in Locums is now more than $600 million.

Kerry Graves: Language services continues to be one of our strongest growing businesses with its strongest pipeline of prospects.

Jeffrey R. Knudson: Offsetting these positives, our Q1 guidance assumes slightly lower nurse and allied segment revenue than fourth quarter levels. First quarter guidance assumes zero labor disruption revenue, and the typical cancellations of some winter needs orders happened earlier in the quarter than usual. The overall labor backdrop is favorable, and this year's 30% increase in ACA marketplace enrollment indicates that the insured population is growing, which we expect will fuel demand utilization. We are encouraged by the green shoots we see from our total market growth strategy and are pleased with our accelerated progress. Our strategy will unfold over multiple years, and we expect our initiatives to have an increasingly positive impact on our business in 2024 and beyond. Now, I'll turn the call over to Jeff, who will review our latest financial results. Thank you, Kerry, and good afternoon, everyone.

Kerry Graves: Offsetting these positives our Q1 guidance assumes slightly lower nurse and Allied segment revenue in the fourth quarter levels.

Kerry Graves: First quarter guidance assumes zero labor disruption revenue and the typical cancellations of some winter needs orders happened earlier in the quarter than usual.

Kerry Graves: The overall labor backdrop is favorable and this year's 30% increase in HCA marketplace enrollment indicate that the insured population is growing which we expect will fuel demand utilization.

Kerry Graves: We are encouraged by the Green shoots we see from our total market growth strategy and are pleased with our accelerated progress.

Kerry Graves: Our strategy won't fold over multiple years, and we expect our initiatives to have an increasingly positive impact on our business later in 2024 and beyond.

Kerry Graves: Now I'll turn the call over to Jeff, who will review, our latest financial results and outlook.

Jeffrey R. Knudson: Thank you Carrie and good afternoon, everyone.

Jeffrey R. Knudson: Fourth quarter revenue was $818 million, which included a $13 million contribution from the November end acquisition of MSDR. Organic revenue was towards the upper end of our guidance range. Consolidated revenue was down 27% from the fourth quarter of 2020. Consequently, revenue was lower by 4%, and organic revenue was down 6%.

Jeffrey R. Knudson: Fourth quarter revenue was $818 million, which included a $13 million contribution from in November and the acquisition of MF Dr.

Jeffrey R. Knudson: Organic revenue was towards the upper end of our guidance range.

Speaker Change: <unk> revenue was down 27% from the fourth quarter of 2022.

Essentially revenue was lower by 4% and organic revenue was down 6%.

Jeffrey R. Knudson: The sequential decrease was driven mainly by the expected lower bill rates, volume, and hours worked in the nurse and allied segment and VMS. Gross margin for the quarter was 31.9%, slightly below our guidance, primarily due to lower bill pay spread in the nursing allied, and Last VMS Rep. Compared with the prior year period, gross margin was down 140 basis points, sequentially, gross margin decreased 200 basis points, primarily due to lower nurse and allied margin and an unfavorable revenue makeshift in technology and workforce. Consolidated SG&A expenses were $185 million, for 22.7% of reps, compared with $219 million or 19.5% of revenue in the prior year period, and $163 million or 19.1% of revenue in the previous. The decrease in SG&A expenses year-over-year was primarily due to lower employee expenses.

Speaker Change: The sequential decrease was driven mainly by the expected lower bill rates volume and hours worked and the nurse and Allied segment and the EMS business.

Speaker Change: Gross margin for the quarter was 31, 9%.

Slightly below our guidance range, primarily due to lower bill pay spreads in the nurse and allied business and less Vms revenue.

Speaker Change: Compared with the prior year period gross margin was down 140 basis points.

Speaker Change: Sequentially gross margin decreased 200 basis points, primarily due to lower nurse and allied margin and an unfavorable revenue mix shift in technology and workforce solutions.

Speaker Change: Consolidated SG&A expenses were $185 million or 22, 7% of revenue compared with $219 million or 19, 5% of revenue in the prior year period.

Speaker Change: 163 million or 19, 1% of revenue in the previous quarter.

Speaker Change: The decrease in SG&A expenses year over year was primarily due to lower employee expenses driven by lower business volumes, along with lower bad debt reserve.

Jeffrey R. Knudson: Driven by lower business volumes, along with lower bad debt, sequentially increased acquisition, integration, and other costs, and SG&A for MSBR led to the increase in SG&A. Adjusted SG&A, which excludes acquisition, integration, and other costs, and Stock Based Compensation. $159 million in the fourth quarter, or 19.4% of revenue, compared with $202 million or 17.9% of revenue in the prior year, and 157 million or 18.4% of revenue in the previous year. In the fourth quarter, nurse and allied revenue was $538 million, down 35% from. sequentially, segment revenue was down 6%.

Speaker Change: Sequentially increased acquisition integration and other costs.

Speaker Change: SG&A for MSCI led to the increase in SG&A expenses.

Speaker Change: Adjusted SG&A, which excludes acquisition integration and other cost.

Speaker Change: Stock based compensation expense was $159 million in the fourth quarter or 19, 4% of revenue compared with $202 million or 17, 9% of revenue in the prior year period.

Speaker Change: $157 million or 18, 4% of revenue in the previous quarter.

In the fourth quarter nurse and Allied revenue was $538 million.

Speaker Change: Down 35% from a year ago.

Speaker Change: Sequentially segment revenue was down 6% driven by lower bill rates volume and hours worked.

Jeffrey R. Knudson: This was driven by lower bill rates, volume, and hours. Average bill rate was down 12% year over year and down 3% sequentially, in line with our expectations and an improvement from the 7% sequential decline we experienced in both Q2 and Q3. Year over year, volume was down 22%, and average hours worked were 4% lower. Consequently, both volume and average hours worked ticked down. Travel nurse revenue in the fourth quarter was $353 million, a decrease of 40% from the prior year period.

Speaker Change: Average bill rate was down 12% year over year and down 3% sequentially.

In line with our expectations and an improvement from the 7% sequential decline we experienced in both Q2 and Q3.

Speaker Change: Year over year volume was down 22%.

Speaker Change: Average hours work were 4% lower.

Speaker Change: Sequentially, both volume and average hours worked ticked down 1%.

Speaker Change: Travel nurse revenue in the fourth quarter was $353 million, a decrease of 40% from the prior year period and 8% from the prior quarter.

Jeffrey R. Knudson: 8% from the prior year. Allied revenue in the quarter was $164 million, down 16% year over year. AmnHealthcare.org, Nurse and allied gross margin during the fourth quarter was 25.5%, which decreased 110 basis points from the prior year period by 200 basis points. The decrease in gross margin was primarily due to lower bill pay spread and lower hours worked. Third quarter gross margin had been unusually high due to some benefits that did not recur, which mainly included a release of a worker's compensation. Segment operating margin of 11.7% decreased 100 basis points year over year due to less revenue and lower growth. Similarly, sequentially, operating margin decreased 280. Moving to the physician leadership solution segment, fourth quarter revenue of $168 million. Interim leadership and service

Speaker Change: Allied revenue in the quarter was $164 million down 16% year over year and 2% sequentially.

Speaker Change: Nurse and Allied gross margin during the fourth quarter was 25, 5%.

Speaker Change: Which decreased 110 basis points from the prior year period, and 200 basis points sequentially.

Speaker Change: The decrease in gross margin was primarily due to lower bill pay spread and lower hours worked.

Speaker Change: Third quarter gross margin had been unusually high due to some benefits that did not recur, which mainly included a release of a workers' compensation reserves.

Speaker Change: Segment operating margin of 11, 7% decreased 100 basis points year over year due to less revenue and lower gross margin.

Sequentially operating margin decreased 280 basis points.

Speaker Change: Moving to the physician leadership solutions segment.

Speaker Change: With quarter revenue of $168 million was flat year over year as organic growth in our locum Tenens and the addition of MSB are were offset by decreases in interim leadership and search.

Jeffrey R. Knudson: sequentially, revenue was up 5% due to MSDR, partially offset by lower revenue from organic locum tissue. Interim, AMN. Locum Tenens revenue in the quarter was $123 million, including $13 million from MSRP, excluding MSBR. revenue increased 7% year over year; slightly lower volume in the organic was more than offset by an increase in bills. Subsequently, organic revenue was down 2%, mainly due to lower volume driven by; Interim leadership revenue of $29 million decreased 35% from the prior year. 85% from the prior, search revenue of 15 million was down 20% year-over-year and down 6% sequentially. Interim and search revenue were down year over year, primarily driven by lower demand.

Speaker Change: Sequentially revenue was up 5% due to MSR, partially offset by lower revenue from organic locum tenens interim and search.

Speaker Change: Locum Tenens revenue in the quarter was 123 million.

Speaker Change: <unk> 13 million from STR.

Speaker Change: Excluding MSP, our revenue increased 7% year over year.

Speaker Change: Slightly lower volume in the organic business was more than offset by an increase in bill rates.

Speaker Change: Sequentially organic revenue was down 2%, mainly due to lower volume driven by seasonality.

Speaker Change: Interim leadership revenue of $29 million decreased 35% from the prior year and 5% from the prior quarter.

Speaker Change: Search revenue was $15 million was down 20% year over year and down 6% sequentially.

Speaker Change: Interim and search revenue were down year over year, primarily driven by lower demand.

Jeffrey R. Knudson: Gross margin for the physician leadership solution segment was 33.3%, down 170 basis points year over year, and in line with the 33.4% gross margin generated in the. The year-over-year decline was mainly due to the revenue mix shift within the sector. Specialty Mixed Change in Local Health Segment operating margin was 13%, which decreased 370 basis points year over year compared with an unusually high profit margin in the fourth quarter of 2022 of 16.7% compared with 13.2% for the full year of 2020. Operating Margin Decreased 50 Bases, Do the revenue makeshift toward. Technology and Workforce Solutions revenue for the fourth quarter was $113 million, down 16% year over year and 7%. Language Services revenue of $68 million increased 18% year-over-year and 3% VMS revenue for the quarter was $31 million, a decrease of 45% year-over-year and 20%. Segment gross margin was 60.5%, down from 73.3% in the prior year period, primarily attributable to lower VMS and R Segment Operating Margin in the fourth quarter was 36.8%, compared with 50.2% in the prior year and 42.1% in the prior quarter as the business mix shifted toward language.

Speaker Change: Gross margin for the physician leadership solutions segment was 33, 3% down.

Speaker Change: Down 170 basis points year over year and in line with the 33, 4% gross margin generated in the third quarter.

Speaker Change: Year over year decline was mainly due to the revenue mix shift within this segment and the specialty mix change and locum tenens.

Speaker Change: Segment operating margin was 13%, which decreased 370 basis points year over year comparing against an unusually high profit margin in the fourth quarter of 2022 of 16, 7% compared with 13, 2% for the full year 2022.

Speaker Change: Sequentially operating margin decreased 50 basis points due to the revenue mix shift towards locum tenants.

Speaker Change: Technology and workforce solutions revenue for the fourth quarter was $113 million down 16% year over year.

Speaker Change: 7% sequentially.

Speaker Change: Language services revenue of $68 million increased 18% year over year and 3% sequentially.

Speaker Change: Vms revenue for the quarter was $31 million, a decrease of 45% year over year and 20% sequentially.

Speaker Change: Segment gross margin was 65% down from 73, 3% in the prior year period, primarily attributable to lower BMS and <unk> revenue and lower gross margin and language services.

Speaker Change: Sequentially gross margin fell 450 basis points, mainly driven by revenue mix shift within the business segment.

Speaker Change: Segment operating margin in the fourth quarter was 36, 8% compared with 52% in the prior year and 42, 1% in the prior quarter as the business mix shifted toward language services.

Jeffrey R. Knudson: Fourth Quarter Consolidated Adjusted EBITDA was $104 million, a decrease of 40% year-over-year; adjusted EBITDA margin for the quarter of 12.7% was at the midpoint of the guide; year-over-year adjusted EBITDA margin was down 280 basis points, and sequentially was down $300,000. The decrease in EBDOM margin year-over-year was primarily due to lower gross margin and lower operating costs. Fourth quarter net income was $12.5 million, down 85% year-over-year and 77%. Fourth quarter gap diluted earnings per share was $0.33.

Speaker Change: Fourth quarter consolidated adjusted EBITDA was $104 million.

Speaker Change: A decrease of 40% year over year and 22% sequentially.

Adjusted EBITDA margin for the quarter of 12, 7% was at the midpoint of the guidance range.

Speaker Change: Year over year, adjusted EBITDA margin was down 280 basis points and sequentially was down 300 basis points.

Speaker Change: The decrease in EBITDA margin year over year was primarily due to lower gross margin and less operating leverage.

Speaker Change: Fourth quarter net income was $12 5 million down 85% year over year and 77% sequentially.

Speaker Change: Fourth quarter GAAP diluted earnings per share was <unk> 33 in the quarter.

Jeffrey R. Knudson: Adjusted earnings per share for the quarter was $1.32 compared with $2.48 in the prior year period. Adjusted earnings per share for the full year was $1.97. Days Sales Outstanding, excluding MSDR, was 5 days higher than the prior quarter and 11 days higher than the prior year, primarily due to billing delays related to a back office system. We expect DSO to return to historical levels. Operating cash flow for the fourth quarter was a use of $41 million, driven by the timing of cash collection and $67 million of deferred income tax. Capital expenditures for the quarter were $30,000.

Speaker Change: Adjusted earnings per share for the quarter was $1 32.

Speaker Change: Compared with $2 48 in the prior year period.

Speaker Change: And $1 97 in the prior quarter.

Speaker Change: Days sales outstanding excluding MSR was 66 five days higher than the prior quarter and 11 days higher than the prior year, primarily due to billing delays related to our back office system conversion.

Speaker Change: We expect DSO to return to historical levels as we progress through 2024.

Speaker Change: Operating cash flow for the fourth quarter was a use of $41 million driven by the timing of cash collections and $67 million of deferred income tax payments.

Speaker Change: Capital expenditures for the quarter were $30 million.

Jeffrey R. Knudson: As of December 31st, we had cash in equivalence of $33 million, long-term debt of $1.3 billion, including a $460 million draw on our revolving line of credit, and a net leverage ratio of 2.2 times. Recapping financial highlights for the full year 2023, we reported revenue of $3.8 billion, a year-over-year decrease of 28 percent.

Speaker Change: As of December 31, we had cash and equivalents of $33 million.

Speaker Change: Long term debt of $1 3 billion, including a $460 million draw on our revolving line of credit and a net leverage ratio of two two times to one.

Speaker Change: Recapping financial highlights for the full year 2023, we reported revenue of $3 8 billion a year over year decrease of 28%.

Jeffrey R. Knudson: Gross margin for the year was 33%, an increase of $30 billion. Adjusted EBITDA was $579 million, a decrease of 32% from the prior year. Full year adjusted EBITDA margin was 15.3%, with 80 basis points lower year-over-year. Net income of $211 million decreased 53% compared with 2022.

Speaker Change: Gross margin for the year was 33% an increase of 30 basis points.

Speaker Change: Adjusted EBITDA was $579 million, a decrease of 32% from the prior year.

Speaker Change: Full year adjusted EBITDA margin of 15, 3% was 80 basis points lower year over year.

Speaker Change: Net income of $211 million decreased 53% compared with 2022.

Jeffrey R. Knudson: For 2023, GAAP EPS was $5.36, and Adjusted EPS was $8.25, compared with GAAP EPS of $9.90 and adjusted EPS of $11.90 in 2020; full year cash flow from operations was $372 million.

Speaker Change: For 2023, GAAP EPS was $5 36.

Speaker Change: And adjusted EPS was $8 21.

Speaker Change: Compared with GAAP EPS of $9 90.

And adjusted EPS of $11 90.

Speaker Change: In 2022.

Speaker Change: Full year cash flow from operations was $372 million and capital expenditures totaled $104 million.

Jeffrey R. Knudson: Capital expenditures totaled $104,000, moving to first quarter 2024 guidance. We project consolidated revenue to be in a range of $810 million to $830 million, down 26% to 28% from the prior year. Gross margin is projected to be between 31 and 31.5%. Reported SG&A expenses are projected to be 21-21.5% of revenue. Operating margin is expected to be 4.2 to 4.9%, and adjusted EBITDA margin is expected to be 11.2 to 11.7%. Average diluted shares outstanding are projected to be approximately 38%.

Speaker Change: Moving to first quarter 2024 guidance, we project consolidated revenue to be in a range of $810 million to $830 million down.

Speaker Change: Down 26% to 28% from the prior year period.

Speaker Change: Gross margin is projected to be between 31 and 31, 5% rips.

Speaker Change: Reported SG&A expenses are projected to be 21 to 21, 5% of revenue.

Speaker Change: Operating margin is expected to be four 2% to four 9% and adjusted EBITDA margin is expected to be 11 to 11, 7%.

Speaker Change: Average diluted shares outstanding are projected to be approximately $38 2 million.

Operator: Additional first quarter guidance details can be found in today's. Operator, please open the call. Thank you. As a reminder, to ask your question, you'll need to press star 11 on your telephone. To withdraw your question, please press star 11 again. Please wait for your name to be announced.

Speaker Change: Additional first quarter guidance details can be found in today's earnings release.

Speaker Change: And now operator, please open the call for questions.

Speaker Change: Thank you.

Speaker Change: As a reminder to ask a question you will need to press star one on your telephone to withdraw your question. Please press star one again.

Speaker Change: Please wait for your name to be announced please standby, while we compile the Q&A roster one moment for your first question. Please.

Trevor Romeo: Please stand by while we compile the Q&A roster. One moment for our first question, please. Our first question comes from the line of Trevor. Romero, with William Blair, your line is open.

Speaker Change: Our first question comes from the line of Trevor.

Trevor: Romero with William Blair. Your line is open.

Cary Grace: Hi, good afternoon. Thanks for taking the questions. One I had just on the supply of nurse and allied professionals and the kind of overall population there, I think last quarter you might have mentioned AMN's applications for nurse and allied roles were somewhere around 30 to 50% above pre-pandemic levels or something like that. So I had a two-part question related to that. One question I guess is, are you still seeing that interest and willingness to take travel assignments well above pre-pandemic levels? And then two, are your clients receptive to, you know, a structurally larger contingent or contract population as a percentage of their overall workforce, or would they like that percentage to go kind of all the way back down to where it was pre-pandemic? Hey Trevor,

Trevor Romeo: Hi, good afternoon, thanks for taking the questions.

Trevor Romeo: One I had just on the supply of nurse and Allied professionals in kind of the overall population. There I think last quarter you might have mentioned.

Trevor Romeo: Applications for nurse and allied roles are somewhere around 30% to 50% above pre pandemic levels or something like that.

Trevor Romeo: Two part question related to that one I guess are you still seeing that interest and willingness to take travel assignments well above pre pandemic levels and then two are you.

Trevor Romeo: Clients receptive to a structurally larger contingent or contract population as a percentage of their overall workforce or would they like that percentage to come kind of all the way back down to where it was pre pandemic.

Cary Grace: Thanks for the question. Let me give a little bit of context about where clients are and a bit about how they're thinking about their workforce. And then I'll touch a bit on what we're seeing in supply in our different businesses. First off, and I think this has been widely documented, particularly over the past quarter, workforce issues remain, if not the top priority for CEOs and the C-suite of healthcare organizations. It's among the top priorities, and so we're seeing the focus on the workforce manifest itself in kind of two ways. One question I have is, how do I continue to focus on expense management?

Speaker Change: Hey, Trevor Thanks for the question, let me give a little bit of context, where.

Speaker Change: Clients are a bit about how they're thinking about their workforce and then I'll touch.

Speaker Change: First off and I think this has been widely documented particularly over the past quarter workforce issues remain if not the top priority for Ceos in suite C suite of health care organizations among.

Speaker Change: Among the top priorities and so we're seeing the focus on workforce manifest itself in kind of two ways.

Speaker Change: One is how do I continue to focus on expense management, that's an overall comment and Workforces are part of it and then the second part of that is how do I ensure I have the right workforce to be able to serve.

Cary Grace: That's an overall comment, and workforce is a part of it. And then the second part of that is, how do I ensure I have the right workforce to be able to serve what they see as increased demand utilization in the coming years? Once you get past those macro conditions, what we see from clients, it really varies client to client with what their mix looks like overall.

Speaker Change: What they see is increased demand utilization in.

Speaker Change: In the coming years.

Speaker Change: Once you get past those macro conditions, what we see from clients.

Speaker Change: It really varies client to client with what their mix looks like overall I would say as a broad comment you saw a tremendous reach.

Cary Grace: I say, as a broad comment, you saw a tremendous reset in 2023 coming off of all-time highs of using contingent labor, and so a lot of the progress of stabilizing you really saw play out in 2023. There are a number of organizations over the past couple weeks who have talked about being at or close to their targets from a contingent standpoint. We also have some systems and some clients who still have some work to go. So I think that where clients are is very client specific. In terms of overall supply, if we look at, I'd say nurse and allied, and there might be some allied specialties where we do see more demand than we have supply.

Speaker Change: A reset in 2023 coming off of all time highs of using contingent labor and so a lot of the progress of stabilizing you really saw play through in 2023, there are a number of organizations over the past couple of weeks, who have talked about.

Speaker Change: Being at or close to their target from a contingent standpoint, we also have some systems and some clients who still have some work to go so I think that where clients are very client specific.

Speaker Change: In terms of overall supply if.

Speaker Change: If we look at I'd say nurse and Allied and there might be some allied specialties, where we do see.

Cary Grace: But generally speaking, the focus is more on how you think about, you know, increasing demand. If you get into our locums business, there is a lot of demand out there, and we continue to think that will be the case in 2024. And so we're very focused on how we continue to increase our supply, and the MSDR acquisition was a big part of that.

Speaker Change: More demand than you have supply, but generally speaking.

Speaker Change: The focus is more on how do you.

Speaker Change: Think about it.

Increasing demand.

Speaker Change: You get into our Locums business.

Speaker Change: You have.

Speaker Change: A lot of demand out there and we continue to think that will be the case in 2024.

Speaker Change: And so we're very focused on how we.

Speaker Change: Continue to increase our supply, which the <unk> acquisition was a big part of that.

Jeffrey R. Knudson: And then if you go into our TWS segment, you typically see VMS follow suit with our nurse and allied segment. And if you look at language services, we continue to see demand, very healthy demand in that space. And so again, our focus is on how do we continue to have the supply to meet that healthy demand. Okay, thanks, Gary. That was really helpful. And then maybe one for Jeff, I guess.

Speaker Change: And then if you go into our Gws segment, you typically see Vms, followed suit with our nurse and Allied segment and if you look at language services, we continue to see.

Speaker Change: Demand very healthy demand in.

Speaker Change: In that space and so again, our focus is on how do we continue to have the supply to meet that that healthy demand.

Speaker Change: Okay. Thanks, Gary that was that was really helpful. And then maybe one for Jeff I guess it.

Jeffrey R. Knudson: I'd be great to get a sense for your bill rate and POA volume assumptions for the nurse and allied segment, I guess, in Q1 and then anything preliminary you have for the rest of 2024. And then as we kind of think about seasonality for the rest of the year, does it feel like the typical seasonality should be coming back to the business in the coming quarters? Or should we still be building in additional room for for normalization? Thanks.

Jeffrey R. Knudson: It would be great to get a sense for your bill rate and Poa volume assumptions for the nurse and Allied segment.

Speaker Change: I guess in Q1, and then anything preliminary you have for the rest of 2024, and then as we kind of think about seasonality for the rest of the year does it feel like the typical seasonality should be coming back to the business in the coming quarters or should we still be building an additional room for for normalization.

Jeffrey R. Knudson: Yeah, so Trevor, in the first quarter, you know, bill rates will be flat over Q4 levels, and so any change in nurse and allied revenue will be driven by volume. So, the implied guidance for nurse and allied is that it'll be down 1 to 4% sequentially, and that'll be entirely driven by TOA. As we look forward, you know, the demand trends that we're seeing, currently, demand is down in the low 20% range from Q4 levels within travel nurse. You know, allied demand remains healthy. It's still above two times from 2019 levels.

Jeffrey R. Knudson: Yes.

Speaker Change: Yes, so trevor in the first quarter Bill rates will be flat over Q4 levels and so any change in the nurse and allied revenue will be driven by volume.

Speaker Change: So the implied guidance for nurse and Allied is that it'll be down 1% to 4% sequentially and that will entirely be driven by GLA.

Speaker Change: As we look forward the demand trends that we're seeing currently demand is down in the low 20% range.

Speaker Change: It was from Q4 levels within travel nurse.

Speaker Change: Demand remains healthy it's still above two times from 2019 levels and on the seasonality point.

Jeffrey R. Knudson: And on the seasonality point, you know, historically, nurse and allied revenue, excluding any impact from labor disruption or acquisitions, would be down mid to high single digits sequentially in Q2 over Q1, with an average of right around six percent. Just given where demand trends sit right now, we would expect that nurse and allied revenue would be down high single digits in the second quarter off of the midpoint of our Q1 guide, which would be And that would be driven more by volume than bill rate, about two-thirds, one-third split. Okay, thanks, Jeff. That's a pleasure.

Speaker Change: Historically.

Speaker Change: Nurse and Allied revenue, excluding any impact from labor disruption or acquisitions would be down mid to high single digits sequentially Q2 over Q1 with an average of right around 6%.

Speaker Change: Just given with where demand trends sit right now we would expect.

Speaker Change: Nurse and Allied revenue would be down high single digits in the second quarter off of the midpoint of our Q1 guide which.

Speaker Change: Which would be at the high end of that range.

Speaker Change: And that would be driven that would be driven more by volume then bill rate about two thirds, one third split there.

Speaker Change: Okay. Thanks, Jeff that's really helpful.

Jeffrey R. Knudson: Thank you. One moment for our next question, please. Our next question comes from the line of AJ Rice with QBS.

Speaker Change: Thank you one moment for our next question. Please.

Speaker Change: Our next question comes from the line of a J rice with UBS. Your line is now open.

AJ Rice: Your line is now open. Thanks. Hi everybody.

AJ Rice: Thanks, Hi, everybody.

AJ Rice: First off.

AJ Rice: First off, generally speaking, when you give your guidance for the quarter ahead, you've got pretty good visibility on it, and I know this time, gross margin dropped, even normalizing for the unusual item in the third quarter, about 170 basis points, and you guys had guided for a 100, I think, decline, 100 basis points in the fourth quarter. I think you singled out pressure and VMS as well as the bill that pays for it tightly. I wondered what they were.

AJ Rice: Generally speaking when you get there.

AJ Rice: For the quarter ahead, you've got pretty good visibility on it and I know.

AJ Rice: This time gross margin dropped even normalizing for the unusual items in the third quarter about 170 basis points and you guys had guided for 100, I think decline 100 basis points in the fourth quarter I think you singled out pressure in Vms as well as.

AJ Rice: The bill pay spread tightening I wondered.

AJ Rice: I assume some of that was already forecast; where was the surprise that ended up being worse than you thought as it played out in the quarter? I would say AJ was predominantly within travel nurse and really on the winter needs orders and the bill pay spread that we took there to drive a higher internal capture on those winter needs. Okay, on the comments around bill pay spread and thinking about that into 24, is it the competitive dynamics that are driving the tightening? Are you trying to cushion the impact on nurses to keep taking additional assignments?

AJ Rice: I assume some of that was already forecast where was the surprise that ended up.

AJ Rice: It being worse than you thought as it played out in the quarter.

AJ Rice: I would say hey, Jay was predominantly within travel nurse and really on the winter needs orders and the bill pay spread that we took there.

AJ Rice: To drive.

AJ Rice: Higher internal capture on those winter needs orders.

AJ Rice: Okay.

AJ Rice: On the comments around bill pay spread and thinking about that into 'twenty four is.

AJ Rice: Is it the competitive dynamics that are driving the tightening are you trying to Cushing.

AJ Rice: The impact of.

AJ Rice: Toward nurses to keep taking additional assignments would give us a little more about what youre seeing in bill pay spread and how quickly that might start to recover.

Jeffrey R. Knudson: Give us a little more about what you're seeing on Bill Pace for it and how quickly that might start to recover. Yeah, I think a quarter ago, AJ, we talked about that there's typically, you know, a two-quarter or so lag in between where bill rates settle out and clinician compensation expectations. As we move into the first quarter of this year, the expectation is that nurse and allied gross margin will be flat over Q4 levels.

AJ Rice: Yes.

AJ Rice: A quarter ago, a J, we had talked about that there is typically a two quarter or so lag in between where bill rates settle out and clinician compensation expectations.

AJ Rice: As we move into the first quarter of this year the expectation is that nurse and allied gross margins will be flat over Q4 levels.

Jeffrey R. Knudson: Underlying that, there is some improvement in the bill pay spread, but that will be masked by the revenue mix issue with our international nurse business trending down sequentially with the impact of visa retrogression. And we would expect that to continue throughout the year, where the bill pay spread will modestly improve as we move through the year, but the impact from visa retrogression will increase and neutralize that. Okay, and maybe one last one to ask about the VMS conversion, the shift-wise upgrade or change. Is that, It sounds like that's affecting the volume of the business that you're doing in VMS, as well as the DSOs. For example, is the DSO impaired, the receivables impaired, or is that just a delay in collection that you'll hopefully recover quickly once the system integration or upgrade is completely done?

AJ Rice: Your line that there is some improvement in the bill pay spread but that will be masked by the revenue mix issue with our international nurse business.

AJ Rice: Trending down sequentially with the impact of Easter Retrogression, and we would expect that to continue.

AJ Rice: Throughout the year, where the bill pay spread will modestly improve as we move through the year, but the impact from visa retrogression will increase and.

AJ Rice: Neutralize that.

Speaker Change: Okay, and maybe one last one to ask about the.

Speaker Change: The BMS.

Speaker Change: Conversion.

Speaker Change: The shift was.

Speaker Change: Upgrade or change is that.

Speaker Change: It sounds like Thats affecting the volume.

Speaker Change: Business.

Speaker Change: What youre doing in BMS as well as the Dsos.

Speaker Change: For example, as the DSO impaired.

Speaker Change: The receivables impaired or is that just a delay in collection that youll have to hopefully recover quickly once the system integrator sooner upgrade is completely done and similarly, some of the pressure you're seeing in BMS is that because of this transition and youll see it revert or other dynamics of what's happening in the business that are put in <unk>.

Jeffrey R. Knudson: And similarly, some of the pressure you're seeing in VMS is because of this transition, and you'll see it revert, or is it other dynamics of what's happening in the business that are putting pressure on you? Yeah, AJ, so the shift-wise classic to shift-wise flex, that has nothing to do with the DSO.

Are you there.

Speaker Change: Yes, Hey, Jay So the shift wise classic shift wise flags that has nothing to do with the DSO that was from an ERP implementation.

Jeffrey R. Knudson: That was due to an ERP implementation in the third quarter of last year, and we're just working through some back-office delays that have led to billing and then also, you know, unapplied cash spiked up post the implementation, which, you know, made it harder, quite honestly, to collect receivables. So that has nothing to do with shift-wise flex, and shift-wise flex also isn't impacting any volumes within the There are only a handful of clients right now that have transitioned onto flex.

Speaker Change: Third quarter of last year, and we're just working through.

Speaker Change: Some back office delays that have led to billing and then also on applied cash.

Speaker Change: Spiked out post the implementation, which made it harder quite honestly.

Speaker Change: To collect receivables so that has nothing to do with shift Wides flax.

Speaker Change: And <unk> also has an impacting any volumes within the BMS business Theres only a handful of clients right now that have transitioned onto flex hey, Jay what I would add to that is what we're seeing as we have now shipped drive flex and the market is that it's being very well.

Cary Grace: Hey, AJ, what I would add to that is what we're seeing as we have announced shift-wise flex in the market is that it's being very well received, and we've started the implementation with clients. We actually implemented our largest client this week, and so the shift-wise flex implementation is going well. Okay. All right. Thanks a lot. You are.

Jay: Received and we have started the implementation with clients, we actually implemented our largest client this week.

Jay: And so the shift wise flex implementation is going well.

Speaker Change: Okay, alright, thanks, a lot.

AJ Rice: Thank you. One moment for our next question. Our next question comes from the line of Kevin Fischbeck with Bank of America. Your line is now open. Great. Thanks.

Speaker Change: Youre welcome. Thank you one moment for our next question. Please.

Speaker Change: Our next question comes from the line of Kevin Fischbeck with Bank of America. Your line is now open.

Kevin Mark Fischbeck: I wanted to ask about the, it sounds like you found a large customer in the quarter. How do we think about the timing of when that contract starts? And as an MSP contract, I guess in the past, you talked about how if you were to lose an MSP contract, you would still be servicing most of that business because, you know, the incumbent would still be relying on you to provide that. I guess, how long should we think about an MSP contract? When should you ramp up as you start to replace, you know, the incumbent vendor within that? Yeah.

Kevin Mark Fischbeck: Great. Thanks I.

Kevin Mark Fischbeck: I wanted to ask about the it.

Kevin Mark Fischbeck: It sounds like you signed a large customer in the quarter, how do we think about the timing of when that contract starts and as MSP contract I guess in the past you've talked about how <unk>.

Kevin Mark Fischbeck: You were to listen to an MSP contract you would still be servicing most of that business because.

Kevin Mark Fischbeck: The incumbent would still be relying on unused to provide that I guess, how long should we think about an.

Kevin Mark Fischbeck: And MSP contract win to ramp as you start to replace the incumbent vendor within that.

Cary Grace: So typically, you would see that take a couple quarters to start seeing the impact of it. So you should expect that those winds would affect you more in the back half of 2024. We have a lot of initiatives going on to continue to do process improvement around speed, but I expect that that's more of a back half phenomenon. Can you give any color related to that contract specifically or just broadly? You know, somewhat as a large customer decided to change, what were they looking to change? How did you fit in and solve that?

Kevin Mark Fischbeck: Yes.

Kevin Mark Fischbeck: Typically you would see that take a couple of quarters.

Kevin Mark Fischbeck: To start seeing the impact of it. So you should expect that those wins would affect more of the back half of 2024.

Kevin Mark Fischbeck: We have a lot of initiatives going on to continue to do process improvement.

Kevin Mark Fischbeck: <unk> b, but expect that that's more of a back half phenomenon.

Can you give any color you mean either related to that contracts typically are just broadly I guess.

Kevin Mark Fischbeck: Some of this large customer decided to change what were they looking to change.

Kevin Mark Fischbeck: How do you fit in and solve that and then I guess, maybe just a broader comment on kind of.

Cary Grace: And then I guess maybe just a broader comment on kind of something that a lot of contracts for renewal mean, which I guess also means things to defend, like maybe any commentary on win rates, retention rates, as well. Yeah, let me give you first where we are on renewal. So if going into 2023, we had effectively three years of renewals that were taking place in 2023, so clients that normally would go through an RFP cycle in 2021 and 2022 during COVID, you know, really push those into 2023. So if we typically had, in any given year, because clients typically have a three to five year RFP cycle, we would be defending, call it 20%, to about a third of our book Last year, in 2023, we were beyond the high end of that range because of the three-year buildup.

Kevin Mark Fischbeck: There are a lot of contract renewal it looks like it's also I mean things to defend so maybe any commentary on win rates retention rates as well.

Speaker Change: Yeah, Let me let me give you first where we are on renewals.

No.

Speaker Change: Going into 2023.

Speaker Change: Had effectively three years of renewal that were taking place in 2023, so clients that normally would go through an RFP cycle in 2021 and 2022 during COVID-19.

Speaker Change: Really push those into 2023.

Speaker Change: So if we typically have in any given year because clients typically have a three to five year RFP cycle, we will be defending call. It 20% to about a third of our book last year. In 2023, we were beyond the high end of that range because of the three year buildup.

Cary Grace: If you look into 2024, as we start the year on renewals, we are at the lower end of that range, including two RFP processes from last year that have come in. So as we start this year, that looks very different than it did last year. So that's comment one on renewals. If we look at from a growth standpoint on our sales pipeline, we have continued to see, as we restarted sales really in the second quarter of last year, a continuation like for like of the build of our overall sales pipeline. And we've also seen the sales pipeline progress. We talked about the wins in my opening comments.

Speaker Change: If you look into 2024 as we start the year on renewals. We are at the lower end of that range, including two RFP processes from last year that came in so.

Speaker Change: So as we start this year that looks very different than it did last year.

Speaker Change: That comment one on renewals if.

Speaker Change: If we look at from a growth standpoint on our sales pipeline. We have continued to see as we have restarted sales really in the second quarter of last year.

Speaker Change: Continuation like for like of the build of our overall sales pipeline.

Speaker Change: And we've also seen that sales pipeline progress we talked about the wins in my opening comments. So we're seeing we're seeing progression both in continuing to build our sales pipeline and continuing to convert that down into wins.

Cary Grace: So we're seeing progression both in continuing to build our sales pipeline and continuing to convert that into wins. Kevin, on your question about, you know, what would be typical for a large client in terms of how we serve this and serve them, it really depends on where their starting point is and where they want to go. Our strategy is that we want to be their preferred provider, no matter what model they want. We ideally want our VMS technology in as the baseline, because once they have our VMS technology in, they can go MSP, they can go dual MSP, they can go vendor neutral, and they can go direct without having to shift any technology.

Speaker Change: I am Kevin on your question about.

What would be typical for a large client in terms of how we serve this.

Speaker Change: Turned them.

Speaker Change: It really depends on where their starting point is and where they want to go our strategy is we want to be their preferred provider no matter what model. They want we ideally want our Vms technology in as the baseline because once they have our Vms technology and they can go MSP.

Speaker Change: I can go do MSP. They can go to vendor neutral they can go direct without having to shift any technology.

Cary Grace: And so if a client starts from MSP and is on our VMS and goes to vendor neutral, we still typically would both serve their tech, we would serve their technology needs, and we would be a supplier. If a client starts from vendor neutral and goes to MSP, we would take a more active role in supplying them. So, it really depends on what their starting point and their ending point is.

Speaker Change: And so if a client starting from MSP and is on our Vms and going to vendor neutral.

Speaker Change: We still typically would both serve their technical needs serve their technology needs and will be a supplier.

Speaker Change: If a client starting from vendor neutral ongoing to MSP, we would take a more active role in supplying them. So it really depends on what their starting point and their ending point is.

Cary Grace: Okay, that's helpful. And I guess maybe because the market is still normalizing to some degree, it's hard to tell exactly what's going on from the outside looking in. I guess, as you think about what happened in Q4 and your guidance. For Q1, would you say, from what you can tell, that you are growing in line with the industry, that you're gaining share within the industry, or that you're losing share within the industry, you know, in those expectations? Yeah, what I would say overall, you know, it's hard to get industry benchmarks, particularly in any given quarter, and especially because we have a different business mix because of the breadth of our solutions than others may have.

Speaker Change: Okay. That's helpful. And then I guess, maybe because of the market still is normalizing to some degree its hard to tell.

Speaker Change: What's going on from the outside looking in I guess as you think about what happened in Q4 and your guidance for Q1 would you say that what you can tell that you are growing in line with the industry that you are gaining share within the industry that you are losing share within the industry.

Speaker Change: And those expectations.

Speaker Change: Yeah, what I would say overall, it's <unk>.

Speaker Change: Hard to get industry benchmarks, particularly in any given quarter, and especially because we have a different business mix because of the breadth of our solutions.

Cary Grace: I think what you saw is given our focus on MSP clients during COVID, during the COVID years, on a relative basis, while we grew overall, we lost some relative positioning in the industry. And if you look, particularly as we left 2023 and went into 2024, as we positioned ourselves against the entire market, again, MSP, vendor neutral, direct, we're getting momentum across the entire market that we didn't have for parts of COVID. Okay, and then maybe just one last question. You know, the commentary about the Q2 seasonality being a little bit higher than normal, and I think it's a two-thirds, volume one-third bill rate. Is the breakout of this Q2 seasonality similar to the normal breakout? Is it normally two-thirds, volume one-third?

Speaker Change: And then others may have I think what you saw is given our focus on MF.

Speaker Change: SP clients during Covid.

Speaker Change: During the Covid years on a relative basis.

Speaker Change: While we grew overall, we lost some relative positioning in the industry and if you look at particularly as we left 2023 and go into 2024, as we positioned ourselves against the entire market again MSP vendor neutral direct.

Speaker Change: We're getting momentum across the entire market that we didn't have for parts of COVID-19.

Speaker Change: Okay, and then maybe just last question.

Speaker Change: The commentary about the Q2 seasonality.

Speaker Change: Being a little bit higher than normal and I think you said two thirds volume one third bill rate.

Is that breakout.

Speaker Change: This Q2 seasonality similar to the normal breakout is it normally two thirds one third.

Jeffrey R. Knudson: Bill Rate from Q1 to Q2, is just sort of magnitude a little bit higher for both, or is one of them, you know, more of a really the driver of that moving from the mid-single-digit to the high-single-digit seasonally? Yeah, Q2 over Q1, we would typically see a low single-digit bill rate decline just as the higher bill rate winner needs orders roll off in the second quarter. So maybe, you know, in totality, it's a little more slanted to the volume side this quarter than it has been historically, Kevin.

Speaker Change: Bill rate from Q1 to Q2, it's just just magnitude sort of makes it a little bit higher for both or is one of them.

Speaker Change: Really the driver of that moving from the from the Mitchell to the high single digits seasonality.

Yes, Q2 over Q1, we would typically see a low single digit bill rate declined just has the higher bill rate winter needs orders roll off in the second quarter. So maybe in totality its a little more slanted.

Speaker Change: So the volume side this quarter than it has been historically Kevin.

Kevin Mark Fischbeck: Okay, perfect. Thank you. Thank you. One moment for our next question, please. Our next question comes from the line of Tobey Sommer from Truist Securities. The line is now open.

Kevin Mark Fischbeck: Okay perfect. Thank you.

Speaker Change: Thank you one moment for our next question. Please.

Speaker Change: Our next question comes from the line of Tobey Sommer from true Securities. Your line is now open.

Tobey Sommer: Thank you. You called out a heavy CapEx year last year. I was wondering, as a percent of sales, would you expect that to trend lower in coming years? And maybe could you characterize what aspects of your tech development and new products and solutions that have resulted you think are ahead of the market, best of class? You referenced many, but I was kind of wondering what the top of the list is.

Tobey Sommer: Thank you.

Tobey Sommer: Called out a heavy capex year last year I was wondering is as a percent of sales would you expect that to trend lower in coming years.

Tobey Sommer: Maybe could you characterize what aspects of your tech development and new.

Tobey Sommer: Products and solutions that have resulted in you think or.

Tobey Sommer: Head of the market best in class.

Tobey Sommer: You referenced.

Speaker Change: Many but kind of wondering what's up.

Speaker Change: Top of the list.

Cary Grace: Yeah, so number one, and we can give more details around, let me kind of philosophically and strategically give you a breakdown of how we're spending the CapEx. One thing you should expect to continue to see us spend as a percentage of revenue on CapEx, maybe not quite as high as this year, but directionally in that range. And if you look at where we spent the dollars in 2023, think about it roughly as about half of that was around how we continue to ensure that our solutions, including our client-facing solutions, our clinician-facing solutions, are innovative and support our clients in what they need to rebuild their workforces sustainably. You saw big spends last year on ShipWise Flex, which we talked about. We've also talked quite a bit about Passport.

Speaker Change: Yeah, So number one and we can give more details around.

Speaker Change: Let me kind of philosophically and strategically give you a breakdown of how we're spending the capex.

Speaker Change: One is you should expect to continue to see us spend as a percentage of revenue.

Speaker Change: On Capex, maybe not quite as high as this year, but directionally in that range and if you look at where we spend the dollars in 2023 think about roughly is about half of that was around how we continue to ensure that our solutions, including our client facing.

Speaker Change: <unk> our clinician facing.

Speaker Change: Solutions are.

Native and supporting our clients and what they need to rebuild their workforces sustainably.

Speaker Change: Big spend last year in ship <unk> Flex, which we talked about we've also talked quite a bit about passport.

Cary Grace: And a lot of our efforts around our solutions, Tobey, were around us getting speed and agility. One of the things that have accelerated over the past five years is not just how you are matching supply and demand but the speed that you are matching that supply and demand. And so, we have both from a tech standpoint and from an operational standpoint achieved huge milestones around our speed. That's important in all markets, but it's particularly important in serving the direct and VMS markets.

Speaker Change: And a lot of our efforts around our solutions Tobey were around us getting speed and agility one of the things that has accelerated over the past five years is not just how you are matching supply and demand.

Speaker Change: Need that you are matching up supply and demand and so we have both on the tech standpoint, and from an operational standpoint.

Speaker Change: It has huge milestones around our speed that's important in all markets, but it's particularly important in serving the direct and Vms market.

Cary Grace: The rest of the CapEx spend, think about it as Jeff mentioned some of the big projects that we were doing around ERP and how we make our organization more efficient. And I would just say, Tobey, in totality, the CapEx should be down about $20 million roughly year over year this year with just some of those larger projects rolling off and not carrying over into 2024. Thanks.

Speaker Change: The rest of the Capex spend think about it as.

Speaker Change: Jeff mentioned some of the big projects that we're doing around ERP and how we make our organization more efficient.

Speaker Change: And I would just say tobey in totality.

Speaker Change: Capex should be down about $20 million roughly year over year. This year with just some of those larger projects rolling off and not carrying over into 'twenty four.

Speaker Change: Thanks.

Jeffrey R. Knudson: I was wondering if you, looking through the lens of the last few years, could talk to us about the fill rates in your MSP business and if they've, if that has flexed as demand has fallen, as has sort of been theoretical for a number of years, and maybe if you could give us some numbers about where that fill rate and direct fill sits currently. Yeah, if you go back and look at what you typically see as you get demand, you know, kind of going up and going down, is that in lower demand environments, you would typically see internal capture in your MSPs go up. As you get higher-demand environments, you will see that internal capture typically goes down.

Speaker Change: Was wondering if you with the lens of looking through the lens of the last few years.

Speaker Change: Talk to us about the.

Speaker Change: Fill rates in your MSP business.

If that has flexed as demand has fallen this has sort of been theoretical for a number of years and maybe if you could give us some numbers about where that fill rate in direct fill sits currently.

Speaker Change: Yes, if you go back and look at what you typically see as you get demand.

Speaker Change: Kind of going up and going down is that in lower demand environment, you would typically see internal capture in your MSP go up.

Speaker Change: As you get higher demand environment, you would see that internal capture typically go down and so if you go back into some of our internal capture rate in our MSP during Covid you.

Cary Grace: And so if you go back to some of our internal capture rates in our MSPs during COVID, you saw that phenomenon where, you know, as you just got this big spike in demand, we were obviously filling for our clients, but we also had a number of other suppliers who took accelerated roles in that. During 2023, if we look at Q4, you know, year over year Q4, our internal fill rate for MSPs went up 450 basis points. So, we have seen that as demand has gone down, we've seen our internal capture go up. And we would expect that to continue in 2024. We're not expecting, as we plan for 2004, for there to be any really significant increase in demand. We do think that all the efforts that we are doing to position ourselves across the broader market, MSPs, and VMS direct, we will have more opportunities to fill in a bigger demand environment. Thank you very much.

Speaker Change: You saw that phenomena, where.

Speaker Change: As you just got this big Spike in demand.

Speaker Change: Obviously filling for our clients, but we also had a number of other suppliers.

Speaker Change: Accelerated roles not during 2023, if we look at Q4 year over year Q4 are.

Speaker Change: Our internal fill rate for MSP has went up 450 basis point.

So we have seen as demand has gone down we've seen our internal capture go up and we would expect that to continue.

Speaker Change: In 2024.

Speaker Change: We're not expecting as we as we plan for 2004 four in the nurse space for there to be any really significant increase in demand.

Speaker Change: We do think that all the efforts that we are doing.

Speaker Change: <unk> ourselves across the broader market MSP Vms direct.

Speaker Change: We'll have more opportunities to fill in a bigger demand environment.

Speaker Change: Thank you very much.

Jeffrey R. Knudson: Thank you. One moment for our next question. Our next question comes from the line of Brian Tanquilut, and Jeffrey's phone line is now open. Hi, this is Noor Roble, and for Brian, thanks for taking my question.

Speaker Change: Thank you.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from the line of Brian <unk>.

Brian: With Jefferies. Your line is now open.

Speaker Change: Hi, This is <unk> in for Brian Thanks for taking my question.

Operator: Looking at Q1 guidance, it looks like revenue is expected to be roughly flat, possibly slightly down sequentially. And given the usual impact of payroll tax increases in Q1, should we expect a sequential decline in EBITDA in Q1?

Speaker Change: Q1 guidance it looks like revenue is expected to be roughly flat, possibly slightly down sequentially given the usual impact of payroll tax increases in Q1 should we expect.

Speaker Change: Sequential decline in EBITDA.

Speaker Change: Q1.

Speaker Change: Great.

Jeffrey R. Knudson: Yeah, there is a sequential decline in EBITDA dollars and in EBITDA margin in the first quarter. That's partially driven by payroll tax, but also gross margin will be down about 60 basis points in Q1 over Q4, primarily driven by mix within the PLS and TWS segments. And then we talked about last quarter that there would be a 5 to 6 million dollar SG&A headwind per quarter in 2024 compared to the Q4 run rate as variable compensation plans reset with the calendar year in Q1.

Speaker Change: Yes, there is.

Speaker Change: The sequential decline in EBITDA dollars and an EBITDA margin in the first quarter, that's partially driven by payroll tax.

Speaker Change: But also gross margin will be down about 60 basis points Q1 over Q4, primarily driven by mix within the Pls in Gws segments, and then we had talked about last quarter that there would be $5 million to $6 million SG&A dollar headwind per quarter.

Speaker Change: In 2024 compared to the Q4 run rate as variable compensation plans reset with the calendar year.

Speaker Change: In Q1.

Jeffrey R. Knudson: Thank you for that. And also, given the increased reporting of utilization across the various health systems, to provide some color on what you're seeing in terms of further volumes, given your current vision into the next couple of quarters. And also, could you just shed some more light on the cadence of top-line growth in EBITDA for this year? Should it mimic pre-COVID patterns or not?

Speaker Change: Got it thank you.

Speaker Change: And also just given the increased reporting of utilization across various health systems to provide some color on what youre seeing in terms of quarter volumes.

Speaker Change: In Europe. The current vision for the next couple of quarter. Then also could you just shed some more light on the cadence of top line growth and EBITDA for this year should it mimic pre COVID-19 patterns or or.

Jeffrey R. Knudson: Yeah, so we had talked a little earlier that, you know, currently, travel nurse orders are down in the low 20% range from where they sat in Q4. I think we touched on the Q2 seasonality that we were expecting, and then typically, you know, Q3 revenue would be flattish over Q2, and then we would see an uptick in the fourth quarter with the winter needs orders. I think there are, you know, a number of tailwinds in the back half, predominantly as it relates to the new client winds, as well as the potential to increase our internal capture that Kerry just talked about. But then, you know, the headwinds that we would face would be, you know, where current demand trends go with our clients, as well as the renewal activity that we have to work through on the MSP client. All right, thank you.

Speaker Change: Thank you.

Speaker Change: Okay.

Speaker Change: Yes, So we had talked a little earlier that currently.

Speaker Change: The travel nurse orders are down.

Speaker Change: In the low 20% range from where they sat in Q4.

Speaker Change: I think we touched on the Q2 seasonality that we were expecting and then typically Q3 revenue would be flattish.

Speaker Change: Over Q2, and then we would see an uptick in the fourth quarter with the winter needs orders I think there are a number of tailwind in the back half predominantly as it relates to the new client wins.

Speaker Change: As well as potential to increase our internal capture that carry just talked about but then the headwinds that we would face would be where current demand trends go with our clients as well as the renewal activity that we have to work through on the MSP client side.

Mark S. Marcon: Thank you. One moment for our next question, please. Our next question comes from the line of Mark Marcon with Baird. Your line is now open. Good afternoon, and thanks for taking my questions. Most of my questions have been asked, but one I was...

Speaker Change: Alright, thank you.

Speaker Change: Thank you one moment for our next question. Please.

Speaker Change: Our next question comes from the line of Mark Marcon with Baird. Your line is now open.

Mark S. Marcon: Good afternoon, and thanks for taking my questions.

Mark S. Marcon: Most of my questions have been asked but one I was.

Cary Grace: I was wondering if you could elaborate a little bit. You mentioned earlier that some of the clients, some of the large hospital systems, have basically taken down their contract nursing staff to, you know, optimized levels or appropriate levels for the current census that they have. But others are still kind of working down. Can you give us an approximate dimension in terms of like, is it half of the hospital systems that you work with down to ideal levels, or a third, or how should we think about that? Just trying to understand, you know, further pressure points that we might see and when we truly get stabilization at the base level. Yeah, I mean, here's how I'd frame it up.

I was wondering if you could elaborate a little bit you mentioned earlier that.

Mark S. Marcon: Some of the clients some of the large hospital systems have basically taken down their contract nursing.

Mark S. Marcon: <unk> gone to optimized levels are.

Mark S. Marcon: Appropriate levels for the current.

Mark S. Marcon: Our sense is that they have but others are still kind of working down can you give us an approximate.

Mark S. Marcon: Dimension in terms of like is it half.

Mark S. Marcon: The hospital systems that you work with our downtown deal levels.

Mark S. Marcon: Third or how should we think about just trying to understand.

Mark S. Marcon: Further pressure points that we might see and when we truly get.

Mark S. Marcon: Stabilization in that base level.

Mark S. Marcon: Yes.

Cary Grace: If you look at where we started in 2023 versus where we're starting, you know, 2024, in aggregate, and obviously, you can see it in our numbers and others' numbers, particularly on the nursing side, clients made significant progress. And it was, again, them getting contingent back into more normalized rates. And at the same time, you saw really aggressive permanent hiring. So that was really the story for 2023.

Mark S. Marcon: Here's how I.

Mark S. Marcon: Frame it up if you look at where we started in 2023 versus where we're starting 2024 in aggregate and obviously you can see it in our numbers and the other's numbers, particularly on the nursing side.

Mark S. Marcon: Clients need significant progress and it was again it was getting contingent back into more normalized rate and at the same time, you saw really aggressive permanent hiring so that was really the story for 2023, if you go back Mark and look at.

Cary Grace: If you go back, Mark, and look at how you would categorize different clients, what we have typically seen is some of the larger and most complex clients moved really fast. You see some clients who have been, were focused on in 2023, but didn't move quite as fast. So I can't think of a client that didn't make progress in 2023, at least our clients. And again, a number of them are at their targets, and we still have work to do. It would be hard to quantify because the other dimension is, we focused a lot on the demand piece, but this is a labor market, and there's a supply dimension as well. And so there is still, you know, a significant portion, you know, healthy portion of nurses and doctors who want to work in a more flexible environment.

Mark S. Marcon: How you would categorize different client.

Mark S. Marcon: What we've typically seen is some of the larger and most complex clients.

Is.

Mark S. Marcon: They do.

Mark S. Marcon: They've moved really fast.

Mark S. Marcon: You see some clients too.

Mark S. Marcon: We're focused on in 2023, but didn't move quite as fast. So I can't think of a client that didn't make progress in 2023 at least our clients.

Mark S. Marcon: And again, a number of them are at their target.

Mark S. Marcon: And we still have work to do it would be hard to quantify because the other dimension is.

Mark S. Marcon: We focused a lot around the demand piece, but this is the labor market and there is a supply dimension as well and so there is still a.

Mark S. Marcon: A significant portion healthy.

Mark S. Marcon: Healthy portion of.

Mark S. Marcon: Nurses and doctors, who want to work in a more flexible environment and so.

Jeffrey R. Knudson: And so it's, you know, how they balance this management of spend with also ensuring that they are getting access to 100% of the available market. Great. And then what are the expectations for MSDR to contribute in Q1 and then over the balance of the year? Yeah, Mark.

Mark S. Marcon: How they've balanced this.

Mark S. Marcon: Management of spend with also ensuring that they are getting access to a 100% of the available market.

Speaker Change: Okay great.

Speaker Change: What are you what are the expectations for MST yard.

Speaker Change: To contribute in Q1, and then over the balance of the year.

Cary Grace: And so we had said MSDR did $13 million in the last month of 2023. You can think about the Q1 expectations in line with that run rate, and then we would expect sequential growth in the second and third quarter from MSDR. And then, in terms of the consolidation with regard to the brand names, it sounds like that's gone really well. It sounds like you're basically not seeing any sort of drop-off in terms of the supply channel.

Speaker Change: Yes, Mark.

Mark S. Marcon: So we had said MSCI did $13 million in the last month of 2023, you can think about the Q1 expectations in line with that run rate and then we would expect sequential growth in the second and the third quarter from STR.

Great.

Mark S. Marcon: Super and then in terms of the consolidation with regards to the brand names.

Speaker Change: It sounds like that's gone really well.

Speaker Change: It sounds like Youre, basically not seeing any sort of drop off in terms of the supply channel.

Cary Grace: I'm wondering if you've got any other additional comments with regard to that, and at some point, would we end up seeing some incremental savings from that consolidation? Yeah, so it has gone very well. And that took a lot of planning and preparation from our team. The couple things that I would focus on, Mark, in terms of when we talk about brand consolidation, there are several elements to it. So one is the obvious one around the logo.

Speaker Change: Wondering if you've got any other additional comments with regards to it.

Speaker Change: Some point.

Speaker Change: Would we ended up seeing some incremental.

Speaker Change: Incremental savings from that consolidation.

Speaker Change: Yeah. So it has gone very well and that took a lot of planning and preparation from our team. The couple of things that I would focus on mark in terms of when we talk about the brand consolidation. There are several elements to it. So one is the obvious around the logo, that's where we get a lot of the all time.

Cary Grace: That's where we get a lot of the all-time highs around awareness of our brand, both on an aided and unaided basis. But importantly, it's about us now having, between our internet and other front doors, including increasingly our Clinician App Passport, one way for clinicians to come in and find all the opportunities professionally that they are potentially interested in. So we see it as an opportunity, frankly, more from a revenue standpoint for us to be able to engage clinicians much more holistically throughout the entirety of their professional careers with the range of different options that we have for them, whether some of those are shorter-term assignments or longer-term and permanent assignments. Thank you. Where you would see some efficiency from a spend standpoint is it will be more efficient for us going forward to be able to continue to increase and get brand awareness when we don't have to support two handfuls of brands, but we're supporting in a more meaningful and substantive way the AMN Healthcare brand. And then the last question, locums, was a bright spot.

Speaker Change: Hi is around.

Speaker Change: Awareness of our brands, both on an aided and unaided basis.

Speaker Change: But importantly, it's about we now have between our internet and other front doors, including increasingly our clinician at passport.

Speaker Change: One way for clinicians to come in and find all the opportunities professionally.

Speaker Change: They are potentially interested in so we see it as an opportunity frankly more from a revenue standpoint.

Speaker Change: For us to be able to engage clinicians much more holistically throughout the entirety of their professional careers with a range of different options that we have for them whether some of those are shorter terms assignment or longer term and permanent assignment.

Speaker Change: Where you would see some efficiency from a spend standpoint is it will be more efficient for us going forward to be able to continue to increase and getting brand awareness. When we don't have to support two handfuls of brands, but we're supporting and a more meaningful and substantive way the AAM in health care.

Speaker Change: Brand.

Speaker Change: Great and then last question.

Mark S. Marcon: It sounds like demand for you has picked up. Are you seeing that across the industry? And if so, what would you attribute that to?

Locums was a bright spot rates it sounds like demand for you has picked up are you seeing that across the industry and if so what would you attribute that to.

Cary Grace: What's changed over the last year that would lead to that pickup in demand? We continue to see, and we expect locums to have continued strong demand in 2024, and that's really more of an industry phenomenon than just an AMN phenomenon. What we have seen is systems really looking at how they are going to meet the increases in utilization that they are experiencing. And so, particularly, as you think about the very well-publicized constraints on physician shortages. It is a drag on revenue and ability to serve patients when you don't have the right physician support.

Speaker Change: What's changed over the last year that would lead to that.

Speaker Change: Pick up in demand.

Speaker Change: We continue to see.

And we expect <unk> to have continued strong demand in 2024.

Speaker Change: Really more of an industry phenomenon than just Amen phenomena.

What we have seen is.

Speaker Change: The system is really looking at how are they going to meet the increases in utilization that they are experiencing.

So, particularly as you think about the very well publicized.

Speaker Change: <unk> on physician shortages.

Speaker Change: Is a drag on revenue and ability to serve patients when you don't have the right physician.

Cary Grace: And so that really is driving a lot of the demand that we're seeing in our in our portfolio. That's great. Could we see some some bill rate increases?

Speaker Change: Support and so that really is driving a lot of the demand that we're seeing.

Speaker Change: In our portfolio.

Speaker Change: That's great could we see some some bill rate increases there.

Jeffrey R. Knudson: Yeah, Mark, when we look, you know, over the course of last year, most of the year over year increases within locums were driven by the rate side more so than, Thank you. Thank you. One moment for our next question, please. Our next question comes from the line of Jeff Silber with BMO Capital Markets. The line is now open. Thanks so much. I know it's late. I'll just ask one.

Speaker Change: Yes, Mark when we look over the course of last year most of the year over year increases within Locums.

Speaker Change: Driven by the rate side more so than volumes.

Speaker Change: Yes.

Speaker Change: Excellent. Thank you.

Speaker Change: Thank you one moment for our next question. Please.

Speaker Change: Our next question comes from the line of Jeff Silber with BMO capital markets. Your line is now open.

Jeffrey Marc Silber: Thanks, So much I know, it's late I'll just ask one.

Jeffrey Marc Silber: Kerry, you've been in your role for a little over a year, and obviously, we all understand this was a really tough year for this business. But if you knew what you know now, what would you have done differently in 2023, and how would that impact your strategy going forward? Jeff, thanks for the question, and as we were writing the 2023 press release, I did reflect on, you know, I started AMN, and 2023 also started at the very beginning of the single biggest historical cyclical reset in the industry. And so, as I think about what we were doing, we were doing two things simultaneously.

Jeffrey Marc Silber: Gary you've been in your role a little over a year and obviously, we all understand this is a really tough year for this business but.

Jeffrey Marc Silber: But if you knew what you know now what would you have done differently in 2023, and how does that impact your strategy going forward.

Gary: Jeff Thanks for the question and as we were riding the 2023.

Jeff: The press release I did reflect on.

Speaker Change: I started at <unk>.

Speaker Change: In 2023 also started at the very beginning of.

Jeff: The single biggest historical cyclical reset in the industry.

Jeff: And so as I think about what we were doing.

Jeff: We were doing two things simultaneously.

Cary Grace: We were helping our customers, our team members, and our company successfully navigate that unprecedented reset. And we very quickly also started to ensure that we were putting in place a series of transformational initiatives that were going to enable our company to be able to more fully participate in the entirety of our market opportunity, frankly, both as we went through the tail end of the reset, but certainly as we came out of the reset. If I go back and look at the things that we focused on, and I'll underline the things that I think we did extraordinarily well in a very tough year, we got focused on clients and our go-to-market strategy incredibly quickly. As I came into this role, that was actually the first thing I did, and we turned back to sales full force.

Jeff: We're helping our customers our team members our company successfully navigate that unprecedented reset.

Jeff: And we very quickly.

Jeff: <unk> started to ensure that we were putting in place a.

Jeff: Series of transformational initiatives that we're going to enable our company to be able to more fully participate against the entirety of our market opportunity.

Jeff: Frankly, both as we as we went through the tail under the reset, but certainly as we came out of the reset.

Jeff: If I go back and look at the things that we focused on and I'll underscore the things that.

Speaker Change: I think we do.

Speaker Change: Did extraordinarily well in a very tough year, we got focused on clients and our go to market strategy incredibly quickly as I came into this role that was actually the first thing I did and we turned back on sales full force.

Cary Grace: We realigned how we think about our clients, and we have a team now that is completely responsible for selling the breadth of our solutions. We started a series of one AMN transformation initiatives. We just talked about the brand, the brand experience ones, but we also engaged in a series of transformative technology and operational initiatives that we're really starting to see make a very big difference in our business. And then we spent a lot of time ensuring that we had financial discipline that matched the reset that we were going through. So we took early actions around expenses to make sure that we were coming down as the market was coming down. And we also made some very strategic capital investments, both in our systems but also in MSDR and growing parts of the market and bought back $425 million in shares.

Speaker Change: We realigned how we think about our clients and we have a team now that is completely responsible for selling the breadth of our solutions.

Speaker Change: We started a series of <unk> transformation initiatives, we just talked about the brand the brand experience one, but we also engaged in a series of transformative technology and operational initiatives that really we're already starting to see make a very big difference in our business.

Speaker Change: And then we spent a lot of time, ensuring that we had financial discipline that matched the reset that we were going through so we took early actions around expenses.

Speaker Change: To make sure that we were coming down as the market was coming down.

Speaker Change: Also made some very strategic capital investments both in our systems, but also in <unk> and growing parts of the market and bought back $425 million and sure. So.

Cary Grace: So, I am very pleased with what we did, both in getting through the reset and positioning ourselves more strongly for 2024 and 2035. Thank you. Thank you. One moment for our next question. Our next question comes from the line of William Sutherland with the Benchmark Company. The line is now open. Thanks. You can call me Bill.

Speaker Change: I am very pleased with what we did both in getting through the reset and positioning ourselves more strongly for 2024 and 2025.

Speaker Change: Alright, thank you.

Speaker Change: Yes.

Speaker Change: Thank you one moment for our next question.

Okay.

Speaker Change: Our next question comes from the line of William Sutherland with Benchmark Company. Your line is now open.

William Sutherland: And I have just got down to two questions. I was wondering, on the fill rate trend, as you look at the most recent orders, do you feel like we've got into an equilibrium here where the fill rates are going to go in the right direction, or are they at a decent level already? On the bill rates, Bill. still.

William Sutherland: Thanks, you can call me Bill.

William Sutherland: And just.

William Sutherland: Just down to two questions.

William Sutherland: I was wondering on the bill rate trends.

William Sutherland: As you look at the most recent orders do you feel like we've got into an equilibrium here.

William Sutherland: Where the rates are good enough.

William Sutherland: Go into right direction.

William Sutherland: CUSIP level already.

William Sutherland: On the bill rates.

Jeffrey R. Knudson: Till rate. End. So, I mean, Kerry had mentioned earlier that on internal capture, we had moved that 450 basis points throughout the course of 2023. I think we'll continue to make progress on that as we move through this year, but as we onboard and ramp up some of those new client wins in the back half, that will be a drag initially as it'll take them time to ramp up to book internal capture, but we should see some progress in the first half.

Still.

William Sutherland: The fill rates.

William Sutherland: So Carrie I mentioned earlier that an internal capture we hadn't moved that 450 basis points throughout the course of 2023 I think we'll continue to make progress on that as we move through this year.

William Sutherland: But as we onboard and ramp up some of those new client wins in the back half that will be a drag initially as it will take those time to ramp quite broken business internal capture rates.

William Sutherland: But we certainly see progress in the first half.

Jeffrey R. Knudson: Okay, yeah, I heard the MSP commentary, and I was thinking actually about just your regular book business, you know, bill rates going with just regular orders and Personnel. Yeah, overall, so that's internal capture overall in the fill rates, you know, we're generally back in line with the pre-COVID trend. Oh, you are. Okay. So, there is, I kind of consider that the metric for equilibrium in the market.

Carrie: Okay, Yes.

Carrie: I heard the MSP commentary I was thinking actually about just your regular book of business.

Carrie: Okay.

Carrie:

Carrie: Hello.

Carrie: Fill rates going with just regular orders.

Carrie: And there is knowledge.

Speaker Change: Yes overall, so that's internal capture overall fill rates.

Speaker Change: We're generally back in line with pre Covid trends.

Speaker Change: Where you are okay. So so jos.

Speaker Change: I kind of consider that the metric for equilibrium.

Jeffrey R. Knudson: And then last one, Jeff, I was actually thinking about capital deployment since you were so active last quarter and beyond just the CapEx plans. AMN.com. How would you sort of prioritize employment?

Speaker Change: In the market.

Speaker Change: And then last one Geoff I was actually thinking about capital deployment.

Speaker Change: Since you were so active.

Speaker Change: Last quarter.

Speaker Change: And beyond just the Capex plans.

Geoff: How would you sort of prioritize deployment.

William Sutherland: You know, whether there's any significant M&A being considered or whether to rather lean in, share the share repurchase slide. Yeah, I think in the near term, right now, with the MSDR acquisition, we're certainly focused on that integration. Leverage is at 2.2 times as we end the year, and in the near term, excess free cash flow will probably be deployed towards debt repayment.

Geoff: Whether there is any significant M&A being considered or rather lean in on the share the share repurchase side.

Geoff: Thanks.

Speaker Change: I think in the near term right now with the <unk> acquisition, we're certainly focused on.

Speaker Change: On that integration.

Speaker Change: Leverage is at two two times.

Speaker Change: As we end the year and in the near term.

Speaker Change: Free cash flow will probably be deployed towards debt repayment.

Jeffrey R. Knudson: Thanks again. Thank you. I'm currently showing no further questions at this time.

Speaker Change: Okay.

Speaker Change: Got it.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Currently showing no further questions at this time I would like to turn the call back over to MS. Karen <unk> for closing remarks.

Cary Grace: I'd like to turn the call back over to Ms. Cary Grace for closing remarks. Thank you for listening to our earnings call and your continued interest in the important work our company is doing in the healthcare workforce. I want to say a special thank you to our AMN team members and our healthcare providers. 2023 required great resilience as we navigated both the biggest industry reset while working to position our organization strongly against our total market opportunity.

Karen: Thank you for listening to our earnings call and your continued interest in the important work our company is doing in the healthcare workforce.

Karen: I wanted to say a special thank you to our <unk> team members and our health care providers.

Karen: 2023 required great resilience as we navigated both the biggest industry reset while working to position our organization strongly against our total market opportunity.

Operator: We look forward to talking to you next quarter. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day. AmnHealthcare.org, Thanks for watching!

Karen: We look forward to talking to you next quarter.

Speaker Change: This concludes today's conference call. Thank you for your participation you may now disconnect everyone have a wonderful day.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].