Q1 2024 AMN Healthcare Services Inc Earnings Call

Operator: Good day, and thank you for standing by. Welcome to AMN Healthcare's first quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Randle Reece, Senior Director of Investor Relations. Please go ahead.

Good day, and thank you for standing by and welcome to the a M and health Care's first quarter 'twenty 'twenty four earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question.

Operator: During the session you will need to press star one on your telephone you will then hear an automated message advising your hand, just raised 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, the conference over to your speaker today Randle Reece.

Randle G. Reece: Senior director of Investor Relations. Please go ahead.

Operator: Yeah.

Randle G. Reece: Good afternoon, everyone.

Randle G. Reece: Good afternoon, everyone. Welcome to AMN Healthcare's first quarter 2024 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 the 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.

Randle G. Reece: Welcome to Aon and Healthcare's first quarter 2024 earnings call.

Randle G. Reece: A replay of this webcast will be available at IR Dot AML healthcare Dot com.

Randle G. Reece: At the conclusion of this call.

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

Randle G. Reece: Specific forward looking statements.

Randle G. Reece: Statements reflect the company's current beliefs.

Randle G. Reece: Based upon the information currently available to it.

Randle G. 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 <unk>.

Randle G. Reece: Most recently filed forms 10-K and 10-Q our.

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

Randle G. Reece: The company does not intend to update guidance or any forward looking statements provided today.

Randle G. Reece: Prior to its next earnings release.

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

Randle G. Reece: Information regarding and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures.

Randle G. Reece: In our earnings release and on our financial reports page at IR Dot <unk> Dot com.

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

Randle G. Reece: The company does not intend to update guidance or any forward-looking statements provided today prior to its next earnings release. 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 Carrie Grace, President and Chief Executive Officer, and Jeff Knudson, Chief Financial Officer. I will now turn the call over to Carrie.

Caroline Sullivan Grace: Thank you, Randy, and welcome to our earnings call. I want to first express my gratitude to the AMN Healthcare Professionals and team members in the U.S. and around the world for their strong commitment and tireless efforts in the first quarter of 2024 in furthering our mission of empowering the future of care, and especially to our wonderful nurses as we recognize them during National Nurses Month for the extraordinary role they play in healthcare.

Caroline Sullivan Grace: Thank you Randy and welcome to our earnings call.

Caroline Sullivan Grace: First quarter revenue of $821 million was in line with expectations, with earnings coming in ahead of consensus estimates. Several of our businesses display positive trends, including language services and locum tenens. Our second quarter revenue guidance for the two business segments, other than Nurse and Allied, is in line with consensus. However, healthcare organizations' focus on reducing contingent labor continues to depress demand for our largest business, nursing staff. We expect nurse and allied segment revenue in the second quarter of 2024 to be down 14 to 16 percent from the first quarter, with nurse staffing declining more than overall.

Caroline Sullivan Grace: I want to first express my gratitude for the health care professional group team members in the U S and around the world for their strong commitment and tireless efforts in the first quarter of 2024.

Caroline Sullivan Grace: Other AMN service lines have been affected by the labor cost squeeze in healthcare, including VMS, RPO, and CERF. Interim leadership, while down year-over-year, shows sequential revenue growth for the first time in six quarters. International nurse staffing revenue in Q1 dropped, as expected, by 11% sequentially and 7% year-over-year due to the State Department's constraints on new visa applications.

Caroline Sullivan Grace: Furthering our mission of empowering the future of care.

Caroline Sullivan Grace: And especially to our wonderful nurses as we recognize them during national nurses month for the extraordinary role they play in health care.

Caroline Sullivan Grace: First quarter revenue of $821 million was in line with expectations with earnings coming in ahead of consensus estimates.

Caroline Sullivan Grace: Several of our businesses display positive trends, including language services and local tenants.

Caroline Sullivan Grace: Our second quarter revenue guidance for the two business segments other than nurse and Allied is in line with consensus.

Caroline Sullivan Grace: Yes.

Caroline Sullivan Grace: Health care organizations focused on reducing contingent labor continues to depress demand for our largest business nurse staffing.

Caroline Sullivan Grace: We expect nurse and Allied segment revenue in the second quarter of 2024 to be down 14% to 16% from the first quarter.

Caroline Sullivan Grace: With nurse staffing declining more than the overall segment.

Caroline Sullivan Grace: Other Almond service line had been affected by the labor cost squeeze in healthcare, including Dms RPM and search.

Caroline Sullivan Grace: Interim leadership, while down year over year showed a sequential revenue growth for the first time in six quarters.

Caroline Sullivan Grace: International nurse staffing revenue in Q1 dropped as expected by 11% sequentially and 7% year over year due to the state department's constraints on new visa application.

Caroline Sullivan Grace: We continue to see strong client demand for international nurses.

Caroline Sullivan Grace: Trends in our alloy business are favorable for some specialties.

Caroline Sullivan Grace: We continue to see strong client demand for international nurses, and friends in our ally business are favorable for some specialties. In the first quarter, we saw good year-over-year growth in volume and net weeks booked for therapy and imaging. Our school's business grew on assignment headcount 20% year-over-year. However, these growing segments were more than offset by declines in lab and especially respiratory, where volume was off 50% from the year-ago quarter late in

Caroline Sullivan Grace: In the first quarter, we started year over year growth in volume and net weeks booked for therapy and imaging.

Caroline Sullivan Grace: Our scores business grew on assignment head count 20% year over year.

Caroline Sullivan Grace: These growing segments were more than offset by declines in lab, and especially respiratory where volume was up 50% from the year ago quarter late in the pandemic.

Caroline Sullivan Grace: As we have discussed in previous quarters, we see clients focused on both near-term labor cost spend as well as implementing new models to sustainably address increasing patient needs. Based on the latest client feedback, the majority of our top MSPs have indicated they have reached or cut below their targets for contingent nurse labor spending. Indications from smaller clients are that their progress on contingent nurse labor spending lags the largest systems by a couple of years. In the first quarter of this year, the four public hospital companies averaged spending 43.7% of revenue on salaries, wages, and benefits, compared with 45.4% for the same quarter five years ago.

Caroline Sullivan Grace: As we have discussed in previous quarters, we see clients focused on both near term labor cost spend as well as implementing new model to sustainably address increasing patient demand.

Caroline Sullivan Grace: Based on the latest client feedback the majority of our top MSP have indicated they have reached a couple of their targets for contingent nurse labor spending.

Caroline Sullivan Grace: Indications from smaller clients are that their progress on contingent nurse labor spending lags the largest system by a couple of quarters.

Caroline Sullivan Grace: In the first quarter of this year the four public hospital companies average spending 43, 7% of revenue on salaries wages and benefits compared with 45, 4% for the same quarter five years ago.

Caroline Sullivan Grace: These figures are consistent with our view that the largest health systems have made substantial progress on labor costs, with some moving to grow in a cost-effective manner to meet increasing utilization. We remain convinced that in the long run, growing patient demand across many different sites of care relative to a finite supply of health care will drive greater opportunities for both nurses, physicians, and other professionals and the Workforce Technology Solutions that help optimize labor utilization. In line with these trends, we are actively partnering with our clients and prospects to develop and implement workforce models that help them improve efficiency and automation and reduce labor costs using our technology and network of healthcare providers.

Caroline Sullivan Grace: These figures are consistent with our view that the largest health systems have made substantial progress on labor cost control with some moving to grow in a cost effective manner to meet increasing utilization.

Caroline Sullivan Grace: We remain convinced that in the long run growing patient demand across many different types of care relative to a finite supply of health care professionals will drive greater opportunity for both nurses physicians and other professionals.

Caroline Sullivan Grace: And the workforce technology solutions that help optimize labor utilization and cost.

Caroline Sullivan Grace: In line with these trends, we are actively partnering with our clients and prospects to develop and implement workforce models that help them improve efficiency and automation and reduced labor costs, using our technology and network of health care professionals.

Caroline Sullivan Grace: We expect the low demand environment to continue for some of our businesses, such as Travel Nurse, VMS, RPO, and, In anticipation of these trends, we are managing second quarter SG&As, excluding share-based compensation, acquisition-related integration, and other costs, to be approximately $10 million lower than the first. Working against lower revenue and growth margin headwinds, we are targeting an adjusted EBITDA margin for Q2 that is in line with our estimates We have reduced headcount to align with the lower demand we have seen in some of our services. In addition, we have taken other actions to restrain spending where appropriate.

Caroline Sullivan Grace: We expect the low demand environment to continue for some of our businesses such as travel nurse Vms.

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Caroline Sullivan Grace: Okay.

Caroline Sullivan Grace: In anticipation of these trends, we are managing second quarter SG&A expenses, excluding share based compensation acquisition related integration and other costs to be approximately $10 million lower than the first quarter.

Caroline Sullivan Grace: Working against lower revenue and gross margin headwinds, we are targeting an adjusted EBITDA margin for Q2 that is in line with analyst estimates.

Caroline Sullivan Grace: We have reduced headcount to align with the lower demand we have seen in some of our service lines.

Caroline Sullivan Grace: In addition, we have taken other actions to restrain spending where appropriate.

Caroline Sullivan Grace: We have reduced our Catholic spending plans for 2024 by approximately 20% to a range of $65 to $70 million for the year, prioritizing spend on key areas of growth and focus with our. This includes rolling out the next generation of our industry-leading, vendor-neutral platform, ShiftWise Flex, to current and new clients. We have successfully migrated clients representing 36% of shift-wise VMS spend onto it in the first quarter and are targeting 70% by the end of the year.

Caroline Sullivan Grace: We have reduced our capex spending plans for 2024 by approximately 20% to a range of $65 million to $70 million for the year.

Caroline Sullivan Grace: Prioritizing spend on key areas of growth and focus with our clients.

Caroline Sullivan Grace: This includes rolling out the next generation of our industry, leading vendor neutral platform shift lifeblood to current and new clients.

Caroline Sullivan Grace: We have successfully migrated clients, representing 36% of shift wise Vms spend onto flex in the first quarter and are targeting 70% by the end of the year.

Caroline Sullivan Grace: Our CapEx plan also includes continued investment in our language services business, which grew 16% year over year. Our industry-leading clinical staffing app, AMN Passport, is contributing a rising percentage of our applicants filling high-need positions. ShiftWise Flex, Passport, and Language Services account for nearly half of our capital. Our one AMN transformation strategy is also proceeding, with some promising gains visible this quarter. New technology and internal process improvements have greatly accelerated our speed in fulfilling orders, which was challenging for us during the pandemic.

Caroline Sullivan Grace: Our Capex plan also includes continued investment in our language services business, which grew 16% year over year.

Caroline Sullivan Grace: Our industry, leading clinical staffing app <unk> passport is contributing a rising percentage of our applicants filling high need jobs.

Caroline Sullivan Grace: <unk> passport and language services account for nearly half of our Capex spend.

Caroline Sullivan Grace: Our one <unk> transformation strategy is also proceeding well.

Caroline Sullivan Grace: With some promising gains visible this quarter.

Caroline Sullivan Grace: New technology and internal process improvement have greatly accelerated our speed in fulfilling orders, which was challenging for us during the pandemic.

Caroline Sullivan Grace: These changes have cut our order to book time and travel nurse and allied staffing by half and enabled us to improve our position in the vendor-neutral market. At our largest third-party client, where we had ranked outside the top 15 suppliers a year ago, AMN has improved to the number three ranking among vendors. Our new SmartSquare mobile app, which enables advanced self-scheduling capability, reached more than 90,000 clinicians in the first 45 days after launch.

Caroline Sullivan Grace: These changes have cut our order to book time in travel nurse and Allied staffing in half in.

Caroline Sullivan Grace: And enabled us to improve our position in the vendor neutral market.

Caroline Sullivan Grace: At our largest third party client, where we had ranked outside the top 15 suppliers a year ago Amen.

Caroline Sullivan Grace: <unk> has improved to the number three ranking among vendors.

Caroline Sullivan Grace: Our new Smart square mobile App, which enables advanced self scheduling capability reached more than 90000 clinicians and the first 45 days after launch.

Caroline Sullivan Grace: And the Smart Square Workforce Optimization Platform is ranked best in the class survey again this year. These outcomes are important milestones for intermediate and long-term growth. All these strategic changes were necessary to restore the ability of AMN to gain market share and serve a fast-changing market that demands broader and more cost-effective solutions to the unique workforce conditions in healthcare, which is expected to be a leading growth sector for the U.S. economy in the coming decades. The physician and leadership solutions and technology and workforce solution segments have attained some stability and revenue outlook after a solid first quarter.

Caroline Sullivan Grace: And the Smart square workforce optimization platform is ranked best in the class survey again this year.

Caroline Sullivan Grace: These outcomes are important milestone for our intermediate and long term growth prospects.

Caroline Sullivan Grace: All of these strategic changes where necessary to restore the ability of Amen to gain market share and survey fast changing market demands broader and more cost effective solution to the unique workforce conditions in health care, which is expected to be our leading growth sector for the U S. <unk>.

Caroline Sullivan Grace: <unk> in the coming decades.

Caroline Sullivan Grace: The physician and leadership solutions and technology and workforce solutions segment have attained some stability in revenue outlook after a solid first quarter.

Caroline Sullivan Grace: AMN is making early gains in reopening its sales engine to the whole healthcare staffing market, and we are seeing our VMS sales pipeline build and progress. With all we have done and have in progress, AMN will be in a better competitive position as the most aligned total talent solutions partner for healthcare professionals and the employers who depend on them when staffing demands arise. We are also demonstrating the ability to right-size our organization in concert with marketing.

Caroline Sullivan Grace: <unk> is making early gains and reopening our sales engine to the whole health care staffing market and we are seeing our Vms sales pipeline build and progress.

Caroline Sullivan Grace: With all we have done and have in progress and then we'll be in a better competitive position as the most aligned total talent solutions partner for health care professionals, and the employers who depend on them when staffing demand comes back.

Caroline Sullivan Grace: We are also demonstrating the ability to right size our organization in concert with market demand.

Caroline Sullivan Grace: Our business mix is more diversified now than in past cycles, helping AMN maintain profit margins that are higher than AMN Experience and other market downturns. We are managing through short-term risks while building for sustainable long-term growth of a talent-rich, values-based organization serving an important mission for all our stakeholders. AMN is proud to have been recognized this month in Becker's Top 150 Places to Work. Our team members have admirably led us through this difficult environment while keeping our strong values and mission at the center of everything we do. Now, I'll turn the call over to Jeff for more details about our results and outcomes.

Caroline Sullivan Grace: Our business mix is more diversified now than in past cycles, helping AML maintain profit margins that are higher than <unk> experienced in other market downturns.

Jeff: We are managing through short term risks while building for sustainable long term growth of a talent rich values based organization, serving an important mission for all our stakeholders.

Jeff: And then is proud to have been recognized this month in Becker top 150 places to work our team members have admirably led through this difficult environment, while keeping our strong values and mission at the center of everything we do.

Caroline Sullivan Grace: Now I'll turn the call over to Jeff for more details about our results and outlook.

Jeffrey R. Knudson: Thank you, Carrie, and good afternoon, everyone. First quarter consolidated revenue was $821 million, down 27% from the first quarter of 2023. Sequentially, revenue was flat, and organic revenue was down 3%. The sequential decrease was primarily driven by volume in the nurse and allied segment and the search and VMS business. Consolidated gross margin for the quarter was 31.4%, near the high end of our guidance frame.

Jeff: Thank you Carrie and good afternoon, everyone.

Jeffrey R. Knudson: First quarter consolidated revenue was $821 million down 27% from the first quarter of 2023.

Jeffrey R. Knudson: Sequentially revenue was flat and organic revenue was down 3%.

Jeffrey R. Knudson: The sequential decrease was primarily driven by volume and the nurse and Allied segment in the search and Vms businesses.

Jeffrey R. Knudson: Consolidated gross margin for the quarter was 31, 4% near the high end of our guidance range.

Jeffrey R. Knudson: Gross margin was lower by 140 basis points year over year, driven mainly by the growth of locum tenens revenue, lower nurse staffing margin, and declines in higher margin businesses, partly offset by a favorable segment mix. Sequentially, gross margin decreased 50 basis points, primarily due to the mixed shift towards locum tenens in physician leadership solutions and lower gross margin in our travel nurse business. Consolidated SG&A expenses were $175 million, or 21.3% of revenue, compared with $206 million, or 18.3% of revenue in the prior year period, and $185 million, or 22.7% of revenue in the previous quarter.

Jeffrey R. Knudson: Margin was lower by 140 basis points year over year, driven mainly by the growth of locum Tenens revenue lower nurse staffing margin and declines in higher margin businesses, partly offset by a favorable segment mix.

Jeffrey R. Knudson: Sequentially gross margin decreased 50 basis points, primarily due to the mix shift towards locum, tenens and physician and leadership solutions and lower gross margin in our travel nurse business.

Jeffrey R. Knudson: Consolidated SG&A expenses were $175 million or 21, 3% of revenue compared with $206 million or 18, 3% of revenue in the prior year period, and $185 million or 22, 7% of revenue in the previous quarter.

Jeffrey R. Knudson: The decrease in SG&A expenses year-over-year reflects our proactive efforts to adjust our expense base to match the current demand environment. sequentially, SG&A expenses decreased as fourth-quarter expenses had been elevated due to the acquisition, integration, and other costs associated with the MSDR Act. Adjusted SG&A, which excludes acquisition, integration, and other costs and stock-based compensation expenses, was $162 million in the first quarter, or 19.7% of revenue, compared with $191 million, or 16.9% of revenue in the prior year period, and $159 million, or 19.4% of revenue in the previous quarter. The resumption of incentive compensation, payroll tax reset, and a full quarter of MSBR operating expenses added $10 million to adjusted STNA compared with the prior quarter, partly offset by efficiency.

Jeffrey R. Knudson: The decrease in SG&A expenses year over year reflects our proactive efforts to adjust our expense base to match the current demand environment.

Jeffrey R. Knudson: Sequentially SG&A expenses decreased as fourth quarter expenses have been elevated due to the acquisition integration and other costs associated with the MSR acquisition.

Jeffrey R. Knudson: Adjusted SG&A, which excludes acquisition integration and other costs and stock based compensation expense was $162 million in the first quarter or 19, 7% of revenue compared with $191 million or 16, 9% of revenue in the prior year period.

Jeffrey R. Knudson: And $159 million or 19, 4% of revenue in the previous quarter.

Jeffrey R. Knudson: The resumption of incentive compensation and payroll tax reset and a full quarter of MSP. Our operating expenses added 10 million to adjusted SG&A compared with the prior quarter, partly offset by efficiency efforts.

Jeffrey R. Knudson: In the first quarter, nurse and allied revenue was $519 million, down 37% from the first quarter of 2023. Sequentially, segment revenue was down 3%, driven by lower volume, partially offset by increased hours worked and allied costs. Average bill rate was down 15% year-over-year and flat sequentially, in line with our expectations.

Jeffrey R. Knudson: In the first quarter nurse and Allied revenue was $519 million down 37% from the first quarter of 2023.

Jeffrey R. Knudson: Sequentially segment revenue was down 3% driven by lower volume, partially offset by increased hours worked and allied businesses.

Jeffrey R. Knudson: Average bill rate was down 15% year over year and flat sequentially in line with our expectations.

Jeffrey R. Knudson: Year over year, volume decreased 24%, and average hours worked were 3% lower. Sequentially, volume was down 3%, while average hours worked increased 1%. Travel nurse revenue in the first quarter was $334 million, a decrease of 44% from the prior year period and 5% from the prior quarter. Allied revenue in the quarter was $170 million, down 13% year over year and up 4% sequentially. Nurse and allied gross margin in the first quarter was 25.1%, which decreased 80 basis points year-over-year and 40 basis points sequentially.

Jeffrey R. Knudson: Year over year volume decreased 24% and average hours worked were 3% lower sequentially.

Jeffrey R. Knudson: Sequentially volume was down 3%, while average hours worked increased 1%.

Jeffrey R. Knudson: Travel nurse revenue in the first quarter was $334 million, a decrease of 44% from the prior year period and 5% from the prior quarter.

Jeffrey R. Knudson: Allied revenue in the quarter was $170 million down 13% year over year and up 4% sequentially.

Jeffrey R. Knudson: Nurse and Allied gross margin in the first quarter was 25, 1%, which decreased 80 basis points year over year, and 40 basis points sequentially.

Jeffrey R. Knudson: The decrease in gross margin year-over-year was primarily due to lower margin in travel nursing driven by less leverage over housing, travel, and allowances and inflation in these expenses, offset in part by a favorable revenue makeshift as the year-over-year declines in travel nursing outpace the rest of the segment. Segment operating margin of 10.3% decreased 350 basis points year over year and 140 basis points sequentially, driven primarily by the deleveraging effect of lower Moving to the Physician Leadership Solutions segment, first quarter revenue of $189 million increased 14% year-over-year, primarily from the MSDR acquisition, partially offset by decreases in interim leadership and search.

Jeffrey R. Knudson: The decrease in gross margin year over year was primarily due to lower margin in travel nurse driven by lost leverage over housing traveling allowances and inflation in these expenses.

Jeffrey R. Knudson: Offset in part by a favorable revenue mix shift as the year over year declines in travel nurse outpaced the rest of the segment.

Jeffrey R. Knudson: Segment operating margin of 10, 3% decreased 350 basis points year over year, and 140 basis points sequentially, driven primarily by the deleveraging effect of lower revenue and to a lesser extent gross margin.

Jeffrey R. Knudson: Moving to the physician and leadership solutions segment first quarter revenue of $189 million increased 14% year over year, primarily from the MSR acquisition, partially offset by decreases in interim leadership and search.

Jeffrey R. Knudson: Sequentially, revenue was up 12%, driven by a full quarter impact of MSDR, partially offset by lower revenue from CERT. Locum Tenens revenue in the quarter was $145 million, up 36% year-over-year, with almost all of the growth from the addition of MSVR.

Jeffrey R. Knudson: <unk> revenue was up 12% driven by a full quarter impact of MSB are partially offset by lower revenue from search.

Jeffrey R. Knudson: Locum Tenens revenue in the quarter was $145 million up 36% year over year with almost all of the growth from the addition of Emmis VR.

Jeffrey R. Knudson: Interim leadership revenue of $30 million decreased 25% from the prior year period, but it was up 3% from the prior quarter, mainly due to positive trends in both volume and price. Search revenue of $13 million was down 29% year-over-year and down 12% sequentially as demand remained soft. Gross margin for the Physician Leadership Solution segment was 31.6%, down 360 basis points year-over-year and 170 basis points sequentially. The year-over-year decline was attributable to the revenue mix shift and a lower bill pay spread in organic locum tenens.

Jeffrey R. Knudson: Interim leadership revenue of $30 million decreased 25% from the prior year period, but was up 3% from the prior quarter, mainly due to positive trends in both volume and pricing.

Jeffrey R. Knudson: Search revenue of $13 million was down 29% year over year and down 12% sequentially as demand remains soft.

Jeffrey R. Knudson: Gross margin for the physician leadership solutions segment was 31, 6% down 360 basis points year over year, and 170 basis points sequentially.

Jeffrey R. Knudson: The year over year decline was attributable to the revenue mix shift and a lower bill pay spread inorganic locum tenants.

Jeffrey R. Knudson: Segment operating margin was 11.8%, which decreased 330 basis points year-over-year, tracking the lower gross margin. Additionally, sequentially, operating margin decreased 120 basis points. Technology and Workforce Solutions revenue for the first quarter was $113 million, down 17% year over year, as the revenue increase within language services was more than offset by the declines in our VMS and outsourced solutions business. Sequentially, revenue was flat. Language Services revenue of $71 million increased 16% year-over-year and 4% sequentially.

Jeffrey R. Knudson: Segment operating margin was 11, 8%, which decreased 330 basis points year over year tracking the lower gross margin.

Jeffrey R. Knudson: Sequentially operating margin decreased 120 basis points.

Jeffrey R. Knudson: Technology and workforce solutions revenue for the first quarter was $113 million down 17% year over year as the revenue increase within language services was more than offset by the declines in our BMS and outsource solutions businesses sequentially.

Jeffrey R. Knudson: Sequentially revenue was flat.

Jeffrey R. Knudson: Language services revenue of $71 million increased 16% year over year and 4% sequentially.

Jeffrey R. Knudson: VMS revenue for the quarter was $29 million, a decrease of 46% year-over-year and 5% sequentially, in line with trends in our travel nurse business. Segment gross margin was 59.9 percent, down from 71.4 percent in the prior year period, primarily attributable to lower VMS and outsourced solutions revenue and lower gross margin in language services. sequentially, gross margin fell 60 basis points, driven by a revenue mix shift within the sector. Segment operating margin in the first quarter was 39.3%, a decrease from 49.3% in the prior year, driven by the change in revenue mix. Segment operating margin increased 250 basis points from the prior quarter.

Jeffrey R. Knudson: Revenue for the quarter was $29 million, a decrease of 46% year over year and 5% sequentially in line with trends in our travel nurse business.

Jeffrey R. Knudson: Segment gross margin was 59, 9% down from 71, 4% in the prior year period, primarily attributable to lower Vms and outsource solutions revenue and lower gross margin and language services.

Jeffrey R. Knudson: Sequentially gross margin fell 60 basis points, driven by revenue mix shift within the segment.

Jeffrey R. Knudson: Segment operating margin in the first quarter was 39, 3% a decrease from 49, 3% in the prior year driven by the change in revenue mix.

Jeffrey R. Knudson: Segment operating margin increased 250 basis points from the prior quarter.

Jeffrey R. Knudson: First Quarter Consolidated Adjusted EBITDA was $98 million, a decrease of 46% year-over-year and 6% sequentially. The Adjusted EBITDA margin for the quarter was 11.9%, which is slightly above the high end of our guidance range. Year over year, adjusted EBITDA margin was down 400 basis points and sequentially was down 80 basis points. The decrease in EBITDA margin year-over-year was primarily due to deleveraging on lower revenue.

Jeffrey R. Knudson: First quarter consolidated adjusted EBITDA was $98 million, a decrease of 46% year over year and 6% sequentially.

Jeffrey R. Knudson: Adjusted EBITDA margin for the quarter of 11, 9% was slightly above the high end of our guidance range.

Jeffrey R. Knudson: Year over year, adjusted EBITDA margin was down 400 basis points and sequentially was down 80 basis points.

Jeffrey R. Knudson: The decrease in EBITDA margin year over year was primarily due to deleveraging on lower revenue.

Jeffrey R. Knudson: First quarter net income was $17.3 million, down 79% year-over-year and up 39% sequentially. First quarter gap, diluted earnings per share, was 45 cents. Adjusted earnings per share for the quarter was $0.97 compared with $2.49 in the prior year period and $1.32 in the prior quarter. Day sales outstanding for the quarter were 64, six days lower than the prior quarter and nine days higher than the prior year.

Jeffrey R. Knudson: Okay.

Jeffrey R. Knudson: First quarter net income was $17 3 million down 79% year over year and up 39% sequentially.

Jeffrey R. Knudson: First quarter GAAP diluted earnings per share was <unk> 45.

Jeffrey R. Knudson: Adjusted earnings per share for the quarter was 97.

Jeffrey R. Knudson: Compared with $2 49 in the prior year period, and $1 32 in the prior quarter.

Jeffrey R. Knudson: Days sales outstanding for the quarter was <unk> 64.

Jeffrey R. Knudson: Six days lower than the prior quarter and nine days higher than the prior year, we expect more progress towards historically normal DSO through the rest of the year.

Jeffrey R. Knudson: We expect more progress towards historically normal DSO through the rest of the year. Operating cash flow for the first quarter was $81 million, and capital expenditures were $18 million. As of March 31st, we had cash in equivalence of $51 million, long-term debt of $1.3 billion, including a $425 million draw on our revolving line of credit, and a net leverage ratio of 2.4 times. Moving to second quarter 2024 guidance, we project consolidated revenue to be in a range of $730 to $750 million, down 24 to 26 percent from the prior year period.

Jeffrey R. Knudson: Operating cash flow for the first quarter was 81 million and capital expenditures were $18 million.

Jeffrey R. Knudson: As of March 31, we had cash and equivalents of $51 million long term debt of $1 3 billion, including a $425 million draw on our revolving line of credit and a net leverage ratio of two four times to one.

Jeffrey R. Knudson: Moving to second quarter 2024 guidance, we project consolidated revenue to be in a range of $730 million to $750 million down 24% to 26% from the prior year period.

Jeffrey R. Knudson: Gross margin is projected to be between 30.7 and 31.2 percent. Reported SG&A expenses are projected to be 21.5 to 22 percent of revenue. Operating margin is expected to be 3 to 3.7%, and adjusted EBITDA margin is expected to be 11 to 11.5%. Average diluted shares outstanding are projected to be approximately 38.3 million.

Jeffrey R. Knudson: Gross margin is projected to be between 37 and 31, 2%.

Jeffrey R. Knudson: <unk> SG&A expenses are projected to be 21, 5% to 22% of revenue.

Jeffrey R. Knudson: Operating margin is expected to be 3% to three 7% and adjusted EBITA margin is expected to be 11 to 11, 5%.

Jeffrey R. Knudson: Average diluted shares outstanding are projected to be approximately $38 3 million.

Operator: Additional second quarter guidance details can be found in today's earnings release. And now, operator, please open the call for questions. Thank you.

Jeffrey R. Knudson: Additional second quarter guidance details can be found in today's earnings release.

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

Operator: Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. And our first question comes from Kevin Fischbeck of Bank of America. Your line is open.

Operator: As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced.

Operator: To withdraw your question. Please press star one again, please standby, while we compile the Q&A roster.

Operator: And our first question comes from Kevin Fischbeck of Bank of America. Your line is open.

Kevin Mark Fischbeck: Great, thanks. Get a little bit more color about kind of how you're thinking about it. I appreciate the comments about the long-term underpinnings of demand for the business. I think those are clear. I guess the question we're also trying to figure out is, you know, when does that bottom? Do you believe that Q2 is kind of where we should be thinking about the bottom and the back half of the year continued growth? Or is it, you know, still not clear? Or do you expect, you know, a little bit more continued decline in the back half?

Kevin Mark Fischbeck: Great. Thanks.

Kevin Mark Fischbeck: A little bit more.

Kevin Mark Fischbeck: Color about kind of how youre thinking about I appreciate the comments about kind of the long term underpinnings of demand for the business I think those are clear I guess the question. We're all still trying to figure out is when does that bottom do you believe that Q2 is kind of where we should be thinking about the bottom in the back half of the year can see credits or is it.

Kevin Mark Fischbeck: Still not clear where do you expect.

Speaker Change: A little bit more continued decline in the back half. Thanks.

Kevin Mark Fischbeck: Sure.

Jeffrey R. Knudson: Hey, Kevin, this is Jeff. So when we look at demand within travel nursing during the first quarter, it was down approximately 30% from the fourth quarter of 23. And in recent weeks, you know, really since April 1st, although demand has been stable, it's down 13% from the first quarter average. So when we look into the back half right now, for Travelers on Assignment within Nurse and Allied, we would expect June to be the lowest point. And those Travelers on Assignment in the month of June will be about 10% lower than the second quarter average. And so that's the trajectory that we would be carrying into the third quarter.

Kevin Mark Fischbeck: Hey, Kevin This is Jeff so when we look at demand within travel nurse during the first quarter. It was down approximately 30% from the fourth quarter of 2003 average.

Jeffrey R. Knudson: And in the recent weeks really since April 1st although that demand has been stable.

Jeffrey R. Knudson: Down 13% from the first quarter average.

Jeffrey R. Knudson: So when we look into the back half right now for travelers on assignment within nurse and Allied we would expect June to be the low point.

Jeffrey R. Knudson: And those travelers on assignment in the month of June will be about 10% lower than the second quarter average and so that's the trajectory that we would be carrying into the third quarter.

Kevin Mark Fischbeck: Hey, Kevin, I mentioned this in the opening comments, but when we talk to our clients, for the majority of our largest MSP clients, they're at or below what their target contingent spend is on the nursing side. We still have some clients who are probably lagging by a couple quarters of what you see in the largest clients. The narrative around the largest clients, I think you've seen that even in some of the public commentary around the largest health systems.

Caroline Sullivan Grace: Thank you. Thank you. Thank you.

Speaker Change: Thanks, Kevin if I mentioned this in the opening comments, but if you.

Caroline Sullivan Grace: As we talk to our clients for the majority of our largest MSP client.

Caroline Sullivan Grace: They're at or below what their target contingent spend is on the nursing side.

Caroline Sullivan Grace: We still have some clients who are probably lagging by a couple of quarters of what you see in the largest client.

Caroline Sullivan Grace: The narrative around the largest clients I think you've seen that even in some of the public commentary around the largest health system and so the question for US and Jeff gave you some color about what we've been seeing over the past quarter and certainly the past couple of weeks is where that kind of across the board stabilizes out between what we're seeing.

Kevin Mark Fischbeck: And so the question for us, and Jeff gave you some color about what we've been seeing over the past quarter and certainly the past couple weeks, is where that kind of across the board stabilizes out between what we're seeing with a number of our clients versus what we're also seeing with some clients who still have some work.

Kevin Mark Fischbeck: With a number of our clients versus what we're also seeing with some clients who still have some work to do.

Caroline Sullivan Grace: Okay, that's helpful, I guess. But so that means though, that you think of the back half of the year off of June, you know, that's kind of the So the low point is there's something to point to there, um, as far as, you know, actual indication of demand, because some of the companies that are public have been saying for a few, several quarters that they might look to hire more, but it doesn't seem like they have, um, just trying to get a little more colors to kind of, is it more just a view of, what you see broadly from a macro perspective supply demand says eventually should go on or they're like firmer kind of Initial conversations about, you know, what the back half or 25 might look like.

Speaker Change: Okay. That's helpful. I guess, so that means that if you think of the back half of the year off in June.

Caroline Sullivan Grace: That's kind of the.

Caroline Sullivan Grace: The low point is there something to point to there.

Caroline Sullivan Grace: As far as.

Caroline Sullivan Grace: Actual indication of demand for some of the companies that are public have been saying for several quarters that they might look to hire more of it doesn't seem like they have.

Caroline Sullivan Grace: A little more color as to kind of is it more just of yields.

Caroline Sullivan Grace: But you see broadly from a macro perspective supply demands as eventually should go on or are there like firmer kind of initial.

Caroline Sullivan Grace: Initial conversations about what the back half of our 25 might look like.

Kevin Mark Fischbeck: Well, I'd say two things. If you look at the macro conditions, all of the supply-demand macro conditions remain intact. In the travel nurse market, because you had such high utilization and cost, coming out of COVID, that was a big area of focus, as we've talked about over the past couple quarters. One is macro conditions, but our focus really is on the bottoms up, rolling up feedback with every individual client and where they are. Not every client has a target, but a number of clients do, especially our largest clients. And so we really are working with them on what their goals are and aggregating that feedback.

Caroline Sullivan Grace: Well I'd say two things if you look at the macro conditions.

Kevin Mark Fischbeck: All of the supply demand as macro conditions remain intact.

Kevin Mark Fischbeck: In the travel nurse market, because you had such high utilization and cost.

Kevin Mark Fischbeck: Coming out of Covid that was a big area of focus as we've talked about over the past couple of quarters, though.

Kevin Mark Fischbeck: One is macro conditions, but our focus really is on bottoms up rolling up feedback with every individual client and where they are.

Kevin Mark Fischbeck: Not every client has a target.

Kevin Mark Fischbeck: Number of clients do, especially our largest clients and so we really are working with them on what their goals are and aggregating up that feedback.

Caroline Sullivan Grace: Okay, great. And maybe this last question, you know, could you talk a little bit about the competitive environment for new contracts? I think last quarter you talked about a relatively large contract that I think is kicking in more towards the end of Q2, so I guess maybe more in Q3 would we see it, but anything to highlight there as far as contract wins, contract losses, turn, things like that heading into the back half? Yeah, um, so we continue to make

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

Speaker Change: Can you talk a bit about that.

Caroline Sullivan Grace: Competitive environment for new contracts I think last quarter, you talked about a relatively large contract that I think is kicking in more towards the end of Q2.

Caroline Sullivan Grace: So I guess, maybe more in Q3 would we see it but.

Caroline Sullivan Grace: Anything to highlight there as far as contract wins contract losses turn it seems like that heading into the back half. Thanks, Yeah.

Caroline Sullivan Grace: Yeah, so we continue to make progress, both on sales and renewals. And I know over the past couple quarters, we talked about coming out of the pandemic. You had really multi-years of renewals that you had, you know, really representing a larger year last year than, certainly, we have this year.

Caroline Sullivan Grace: So we continue to make progress both on sales and renewals that I know over the past couple of quarters, we talked about coming out of the pandemic you had really multi years of renewals.

Caroline Sullivan Grace: That you had.

Caroline Sullivan Grace: Really representing a larger year last year, then certainly we have this year, we are tracking better on those sales.

Caroline Sullivan Grace: We are tracking better on both sales and, I'd say, overall renewals than last year. We continue to build and progress our pipeline from a sales standpoint, and almost half of our pipeline is vendor neutral. So, we're making progress as expected.

Caroline Sullivan Grace: And I'd say kind of overall renewals than last year.

Caroline Sullivan Grace: Continue to build and progressed our pipeline from a sales standpoint, and almost half of our pipeline.

Caroline Sullivan Grace: <unk> vendor neutral so.

Caroline Sullivan Grace: We're making progress as expected.

Caroline Sullivan Grace: What I will say is it's a very competitive market. It has been a competitive market, and we expect it to continue to be a competitive market.

Caroline Sullivan Grace: What I will say is it's a very competitive market. It has been a competitive market. We expect it to continue to be a competitive market.

Speaker Change: Okay, great. Thanks.

Operator: Thank you. One moment for the next question. And our next question comes from Trevor Romeo of William Blair. Your line is open.

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

Operator: Okay.

Operator: And our next question comes from Trevor Romeo with William Blair. Your line is open.

Trevor Romeo: Hi, good afternoon. Thanks for taking the time to ask the question. I just wanted to go back one more on the demand environment for nursing allied. I guess when you speak to the client base, are you still seeing a high level of scrutiny on the staffing decisions from the CFOs or the finance organizations or the clients? Or is some of that decision making starting to shift back to the clinical side? Just kind of wondering if that might be a sign of alleviating pressure if some of the CFOs kind of take a step back in that process. Yeah,

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

Trevor Romeo: I just wanted to go back one more on the demand environment for nurse and Allied I guess, when you speak to the client base.

Trevor Romeo: Are you still think a high level of scrutiny on the staffing decisions from the CFO or the finance organizations with the clients or anything to that decision, making starting to shift back to the clinical side, just kind of wondering if that might be a sign of alleviating pressure with some of the cfo's kind of take a step back in that process.

Caroline Sullivan Grace: Yeah, thanks Trevor. I would say it depends on the client. And so we have some clients where you still see, I'd say, strong engagement of both the clinical team and the finance team in those decisions. You see some clients where it really is the clinical team looking at how they're going to staff relative to their target. Our goal, as you know, is to be the total talent solutions partner for our clients. So we work with our clients on how they want to staff across the board. And that's through the clinical team; the finance team is often engaged, and how they optimize their workforce against patient demand.

Trevor Romeo: Yeah.

Speaker Change: Thanks, Trevor I would say it depends on the clients and so we.

Caroline Sullivan Grace: We have some clients, where you still see a strong engagement of both the clinical team and the finance team.

Caroline Sullivan Grace: And those decisions.

Caroline Sullivan Grace: You see some clients where it really is the clinical team looking at how theyre going to staff relative to their targets.

Caroline Sullivan Grace: Our goal as you know is we want to be the total talent solutions partner for our clients.

Caroline Sullivan Grace: So we work with our clients on how they want to staff across the board.

Caroline Sullivan Grace: And thats through the clinical team the finance team is often engaged and.

Caroline Sullivan Grace: And how they optimize their workforce against the patient demand they're seeing.

Trevor Romeo: Okay, thanks, Kerry. That's helpful. And then for the follow up, just switching over to the locum side.

Trevor Romeo: Okay. Thanks, Kerry that's helpful and then for the follow up just switching over to the local side and this is your first full quarter with <unk>. So if you have any update on how thats fitting into the company. That's part of that would be great and then on the organic side I think Jeff you had almost all the growth was final step out in the quarter.

Trevor Romeo: So could you give us maybe a progress update on some of the efforts to reinvigorate growth.

Speaker Change: On the legacy side of Locums, and where Youre seeing success are still some challenges there.

Caroline Sullivan Grace: And this is your first full quarter with MSDR. So if you have any update on how that's fitting into the company thus far, that would be great. And then on the organic side, I think Jeff said almost all the growth was from MSDR in the quarter. So could you give us maybe a progress update on some of the efforts to reinvigorate growth, kind of on the legacy side of locums, and where you're seeing success or still seeing some challenges there?

Kerry: Yes, let me start and.

Caroline Sullivan Grace: And talk a little bit about MCR and so I think this is officially their first full quarter.

Jeffrey R. Knudson: Yeah, let me start and talk a little bit about MSDR. And so I think this is officially their first full quarter on the AMN team.

Jeffrey R. Knudson: Part of the M N T.

Caroline Sullivan Grace: And we are both excited about what they can do for our clients and excited about working with them. We talked about, you know, the rationale behind MSDR and what it could do for our locums portfolio, particularly in their strengths around site surgery, radiology, and behavioral health. What we focused on in the first quarter was integration. So when we talked about the MSDR acquisition, it really was the acquisition, to some degree, of two companies, MSI and DRW.

Jeffrey R. Knudson: <unk> and we are both excited about what they can do for our clients and excited about working with them.

Caroline Sullivan Grace: We talked about the rationale behind <unk> and what it can do for our local portfolio, particularly in their strengths around site surgery radiology and behavioral health.

Caroline Sullivan Grace: What we focused on in the first quarter is the integration. So when we talked about the <unk> acquisition. It really was the acquisition to some degree of two companies MSI and Dr. W and so while those two companies shared backend systems.

Caroline Sullivan Grace: And so while those two companies shared back-end systems and a number of functions, they still hadn't integrated some of their front office capabilities, including their candidate pool. So in the first quarter, we focused on and completed the integration of those two firms so that we could then integrate and start doing order sharing with AMN. So that integration went very well, and we are in the process of starting to do order sharing now with that combined company and AMS.

Caroline Sullivan Grace: And a number of functions. They still had an integrated some of their front office capabilities, including their candidate pool. So the first quarter, we focused and completed the integration of those two firms. So that we could then integrate and start doing order sharing with Amen.

Caroline Sullivan Grace: So that integration went very well and we are in the process is starting to do the order sharing now with that combined company with Diana.

Caroline Sullivan Grace: We did not have some of the revenue growth during that integration that we would have expected. And so as we now have the integration completed on an accelerated timeline, and we're starting to do order sharing with AMN, we are excited about what that can do to help us with the locum demand that we have as we go through this quarter and beyond.

Caroline Sullivan Grace: We did not have some other revenue growth during that integration that we would have expected.

Caroline Sullivan Grace: And so as we now have the integration completed on an accelerated timeline and we're starting to order sharing with Amen.

Caroline Sullivan Grace: We are excited about what that can do to help us with the local demand that we have as we go through this quarter and beyond.

Jeffrey R. Knudson: Trevor, this is Jeff. On the core side, the locums business was up 1% year over year. We would expect sequential growth on the core side as we move into Q2 and then improve year over year comparisons in the back half for organic locums.

Caroline Sullivan Grace: Okay.

Jeffrey R. Knudson: Okay.

Jeff: Core side, the Locums business was up 1% year over year, we would expect sequential growth on the core side as we move into Q2, and then improving year over year comparisons in the back half for organic Locums.

Trevor Romeo: Okay, understood. Thanks, Jeff. I appreciate it. Thank you. One moment for our next.

Trevor Romeo: Okay understood. Thanks, Jeff I appreciate the color.

Operator: Thank you. One moment for our next question, and our next question comes from A.J. Rice of UBS. Your line is open.

Trevor Romeo: Thank you one moment for our next question.

Albert J. William Rice: And our next question comes from AJ Rice of UBS. Your line is open.

Albert J. William Rice: Thanks. Hi everyone. First of all, maybe just to go back to contracting and customer activity. Last year, there was a lot of chatter about an unusually high number of people going out for contracting, people wanting to try something different post-pandemic. If they had been an MSP, maybe they would have looked at vendor-neutral solutions. Or maybe they would have looked at insourcing. Have we sort of worked through that, and now it's back to the normal course of business that you have contracts coming up, but maybe some of that accelerated churn and a desire to try something different have been satisfied at this point? Or how would you characterize customers' approach to RFPs?

Albert J. William Rice: Thanks, Hi, everyone.

Albert J. William Rice: First of all maybe just to go back to.

Albert J. William Rice: Contracting in customer activity.

Albert J. William Rice: Last year, there was a lot of chatter about an unusually high number of people who went out for contracting people wanting post pandemic.

Albert J. William Rice: Something different if they had been MSP, maybe they were going to look good.

Albert J. William Rice: Vendor neutral solution. So maybe they were going to look at it in sourcing.

Albert J. William Rice: Are you.

Albert J. William Rice: Sort of work through that and now it's back to normal course of business that you have contracts come up but maybe some of that.

Albert J. William Rice: Accelerated churn.

Albert J. William Rice: Prior to try something different.

Albert J. William Rice: <unk> has been satisfied at this point or how would you characterize customer.

Albert J. William Rice: Customers' approach to Rfps.

Caroline Sullivan Grace: You know, I'd almost kind of take it as if I look at the approach to RFPs, you did have What I'd say this kind of hiatus during the pandemic that probably created a little bit of a higher watermark last year. But the thing that we're seeing from clients is really looking at, you know, new models that are going to help them build a workforce in a, you know, labor environment that they And so, the conversations, and what we get very excited about, especially given our solutions portfolio, is that there's a lot of focus on the tech enablement of those capabilities.

Albert J. William Rice: I'd almost.

Caroline Sullivan Grace: Take it as if I look at.

Caroline Sullivan Grace: Coach to Rfps you did have.

Caroline Sullivan Grace: What I would say this.

Caroline Sullivan Grace: Kind of hiatus during.

Caroline Sullivan Grace: The pandemic that that probably created a little bit of an up.

Caroline Sullivan Grace: Higher watermark.

Caroline Sullivan Grace: Last year the thing that we're seeing from clients is really looking at.

Caroline Sullivan Grace: The new models that are going to help them build a workforce in a.

Caroline Sullivan Grace: Labor environment that they expect to continue to be supply constrained and so the conversations and what we get very excited about especially given our solutions portfolio is theres a lot of focus on the tech enablement.

Caroline Sullivan Grace: Those capabilities and so as we talk to clients we rolled out.

Caroline Sullivan Grace: And so, as we talked to clients, we rolled out automated technology that enabled internal float pools and went live with our clients last year on that. And so, those types of solutions, AJ, I think there's as much interest, and maybe, on the margin, even more interest around how do I really think about the next generation of solutions that we can work with you on to build a sustainable workforce that's both high quality, cost-effective, and more automated.

Caroline Sullivan Grace: Automated technology that enables internal float pools and went live.

Caroline Sullivan Grace: With.

Caroline Sullivan Grace: Our clients last year on that and so those types of solutions, a J I think theirs.

Caroline Sullivan Grace: As much interest and maybe on the margin even more interest around.

Caroline Sullivan Grace: How do I really think about the next generation of.

Caroline Sullivan Grace: Solutions that we can work with you on to build.

Caroline Sullivan Grace: <unk> sustainable workforce that those high quality cost effective and more automated.

Caroline Sullivan Grace: Okay. I know there is a lot of focus on demand, and rightly so, but any updated thoughts on how supply is trending? Are you seeing new recruits coming into travel nursing? Have you seen most of the people that maybe just did it on a temporary basis during the pandemic wash out at this point? His expectations around pay rates for the people that are doing travel nursing, have those sort of gotten in line with where the market is?

Caroline Sullivan Grace: Okay.

Caroline Sullivan Grace: I know a lot of focus on demand and rightly so but.

Caroline Sullivan Grace: Any updated thoughts on how supply is trending are you seeing new recruits coming too.

Caroline Sullivan Grace: Travel nursing have.

Caroline Sullivan Grace: Have you seen most of the people that maybe just David on a temporary basis and the pandemic.

Caroline Sullivan Grace: Wash out at this point as expectations around.

Caroline Sullivan Grace: Hey rates.

Caroline Sullivan Grace: The people that are.

Caroline Sullivan Grace: Doing.

Caroline Sullivan Grace: Travel nursing is that is that sort of gotten in line with where the market is.

Caroline Sullivan Grace: Yeah, if you look overall, new applications remain above pre-pandemic levels. So you can look at that as, I'd say, a general commentary on supply. You're gonna find pockets.

Speaker Change: Yes, if you look overall, new applications remain above pre pandemic levels.

Caroline Sullivan Grace: You can look at that as I say, a general commentary on supply youre going to find pockets. We have this in certain specialties of Allied we have it I would say across the physician market.

Caroline Sullivan Grace: We have this in certain specialties of Allied. We have it, I'd say, across the physician market, where you're gonna have more demand than supply. If you look at the psychology, and then I'll specifically talk to travel nurses, we do a survey. And if you look at the survey, there's a high single-digit percentage of almost 20,000 nurses that said, you know, they wanted to travel. And, you know, for that core group, it wasn't necessarily just around pay; it was around lifestyle and ability to manage well-being.

Caroline Sullivan Grace: Where youre going to have more demand than supply.

Caroline Sullivan Grace: If you look at the psychology, and then I'll specifically talk to.

Caroline Sullivan Grace: Traveling nurse, we do a survey and if you look at the survey there is high single digit percentage of almost 20000 nurses that said.

Caroline Sullivan Grace: They wanted to travel and.

Caroline Sullivan Grace: For that core group it wasn't necessarily just around pay it was around lifestyle ability to manage wellbeing and so.

Caroline Sullivan Grace: And so that core group, I think we continue to see strong interest in doing travel roles. There were some nurses who may have come in during the pandemic, both as the service and need arose, and also the pay, but I think you've largely seen that normalized back.

Caroline Sullivan Grace: That core group I think we continue to see strong interest in doing travel roles.

Caroline Sullivan Grace: There were some nurses who may have come in at the pandemic.

Caroline Sullivan Grace: <unk>.

Caroline Sullivan Grace: As the service the need arise and also the pay that I think you've largely seen that normalize back.

Jeffrey R. Knudson: A.J., on your bill pay spread question, I would just say, you know, when we look at the second quarter for nurse and allied gross margin, the pay rates relative to the bill rates quarter over quarter compared to the first quarter are very stable. It's really the other element of the pay package, housing and travel, that are putting some pressure on the nurse and allied gross margins, along with the mixed shift away from international nurses due to the impacts of visa retrogression and, to a lesser extent, we're seeing a reduction in hours, particularly within allied, which is what's causing the sequential pressure in Q2 on the nurse and allied gross margin.

Speaker Change: Hey, Jay.

Jeffrey R. Knudson: Hey, Jay on your Bill pay spread question I would just say when we look at the second quarter for nurse and Allied gross margin.

Jeffrey R. Knudson: The pay rates relative to the bill rates quarter over quarter compared to the first quarter are very stable, it's really the other elements of the pay package.

Jeffrey R. Knudson: Housing and travel that are putting some pressure on the nurse and allied gross margins along with the.

Jeffrey R. Knudson: The mix shift away from international nurse due to the impact of visa retrogression and to a lesser extent.

Jeffrey R. Knudson: We're seeing a reduction in hours, particularly within allied is what's causing the sequential pressure in Q2 on nurse and Allied gross margins.

Albert J. William Rice: Okay. All right. Thanks a lot.

A.J.: Okay, alright, thanks, a lot.

Operator: Thank you. One moment for our next question, and our next question comes from Brian Tanquilut of Jeffreys. Your line is open.

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

Brian Gil Tanquilut: And our next question comes from Brian <unk> of Jefferies. Your line is open.

Brian Gil Tanquilut: Hey, good afternoon. I just wanted to clarify some of the comments so far. So what I'm hearing is June is probably the bottom, but I also hear, Carrie, your comments about how your smaller clients are saying that you're probably a couple of quarters away from seeing the bottom of them, you know, reducing their reliance on temps. So just curious, I mean, without taking guidance, right? Is it right to think that there could be a carryover impact or further declines in revenue as we think about Q3 versus Q2?

Brian Gil Tanquilut: Hey, good afternoon.

Brian Gil Tanquilut: Just want to reconcile the comment so far so what I'm hearing is June is probably the bottom, but I also this year Jerry your comments about how youre smaller clients are saying that they are probably a couple of quarters away from seeing the bottom.

Brian Gil Tanquilut: The <unk>.

Brian Gil Tanquilut: Reducing there.

Brian Gil Tanquilut: Reliance on top so just curious I mean without taking guidance right but.

Brian Gil Tanquilut: Is it right to think that there should be carrier could be carry over impact.

Brian Gil Tanquilut: The decline in revenue as we think about Q3 versus Q2.

Jeffrey R. Knudson: That's right, Brian. I don't think we were saying that Q2 or that June was the bottom. We were saying it was the low point within the second quarter. And so that'll be about 10% below the average Traveler's Own Assignment that we have for the entire quarter. We would also expect, you know, some modest bill rate decreases in the low single digits in Q3 over Q4.

Speaker Change: That's right Brian.

Speaker Change: I don't think we are saying that Q2.

Jeffrey R. Knudson: That June was the bottom we were saying at the low point within the second quarter, and so that will be about 10% below the average travelers on assignment that we have for the entire quarter.

Jeffrey R. Knudson: We would also expect some modest bill rate decreases in the low single digits Q3 over Q2.

Brian Gil Tanquilut: Got it. Okay, thanks for that, Jeff. And then maybe my next question, as I think about the technology side of the business, obviously, VMS is tied to the performance of Nurse and Allied, but outside of that, in the translation services side, is there anything that we need to be thinking about as we model that for Q2 and Q3.

Brian: Got it okay. Thanks, Thanks for that Jeff and then my next question as I think about the technology side of the business. Obviously Vms is tied to the performance of nurse and allied but outside of that.

Brian Gil Tanquilut: The translational services side is there anything that we need to be thinking about as we model that for Q2 and Q3.

Jeffrey R. Knudson: Now, we would expect that to continue to grow in line with the Q1 growth rate for the remainder of the year, Brian. All right. Got it. Awesome. Thank you.

Jeff: No we would expect that to continue to grow in line with the Q1 growth rate really for the remainder of the year Brian.

Speaker Change: All right got it thank you.

Operator: Thank you. One moment for our next question, and our next question comes from Jeff Silber of BMO Capital Markets. Your line is open.

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

Operator: And our next question comes from Jeff Silber of BMO capital markets. Your line is open.

Jeffrey Marc Silber: Thanks so much. Just wanted to, again, just come back to some of the numbers within the guidance. For example, the revenue guidance for the second quarter, is it possible to give us some color between bill rates and volumes that go into that?

Jeffrey Marc Silber: Thanks, So much just wanted to again just come back to some of the numbers within the guidance.

Jeffrey Marc Silber: The revenue guidance for the second quarter is it possible to give us some color between bill rates and volumes that go into that.

Jeffrey R. Knudson: Yeah, sure, Jeff. Bill rates for the nurse and allied segment will be down low single digits when compared to Q1, in line with our expectations, given that the winner needs orders, that those clinicians will be rolling off in the second quarter. And then, volume within Nurse and Allied will be down in the low double-digit range in Q2.

Jeffrey Marc Silber: Yes, sure Jeff Bill rates for the nurse and Allied segment will be down low single digits when compared to Q1 in line with our expectations given that the winter needs orders.

Jeffrey R. Knudson: That those clinicians will be rolling off in the second quarter and then.

Jeffrey R. Knudson: Volume within nurse and Allied will be down in the low double digit range Q2 over Q1.

Jeffrey Marc Silber: Just writing this down, thank you so much. And then you mentioned some of the issues from an international perspective. When do those visa limits expire, when are they anniversaries, and do you expect, you know, any change, any reopening in that?

Jeffrey R. Knudson: Okay.

Speaker Change: Thank you so much.

Jeffrey Marc Silber: And then.

Jeffrey Marc Silber: You had mentioned some of the issues from an international perspective, when does that those visa limits.

Jeffrey Marc Silber: When are they Anniversaried and do you expect any change any reopening of that.

Jeffrey R. Knudson: no change really for the remainder of the year. And we would expect to continue to see quarter over quarter sequential declines in that business as we move through the remainder of the year, and the fourth quarter will be the low point, which, you know, absent any intervention would lead 25 to be down over 24 as well, but not to the same degree on a percentage basis.

Jeff: No change really for the remainder of the year and we would expect to continue to see quarter over quarter sequential declines in that business as we move through the remainder of the year in the fourth quarter will be the low.

Speaker Change: Good point.

Jeffrey R. Knudson: Which absent any intervention would lead 25.

Jeffrey R. Knudson: To be down over 24, as well, but not to the same degree on a percentage basis and Jeff They do do they do updates.

Caroline Sullivan Grace: Hey, and Jeff, they do updates throughout the year. We would expect, really, if there was going to be a change, that it would start trending more towards the end of the year, where we would start seeing that in some of the bulletins, potentially.

Caroline Sullivan Grace: No.

Caroline Sullivan Grace: Throughout the year.

Caroline Sullivan Grace: We would expect it really if there is going to be a change that it would start trending more towards the back of the year, we would start seeing that in some of the bulletins potentially okay.

Jeffrey Marc Silber: And then, just from there, just maybe a broader, you know, maybe political question, you know, we're heading into election season, I know, you know, there's not necessarily any federal overriding regulations that impact your business. I know there are some, but from a big picture, not as much as some other industries. But can you talk about what the environment might be like if we do see a change in administration, and are there any specific states to call out where there may be some changes going on?

Jeffrey Marc Silber: And then just from there just maybe a broader maybe political question.

Jeffrey Marc Silber: Heading into election season.

Jeffrey Marc Silber: No.

Jeffrey Marc Silber: There's not necessarily any federal overriding regulation that impact your business I know there are some but from a big picture not as much as some other industries.

Jeffrey Marc Silber: Can you talk about what the environment might be like if we do see a change in administration and are there any specific states to call out where there may be some changes going on.

Caroline Sullivan Grace: You know, what I would say from a state standpoint, I think you're seeing some of the, you know, it's a highly regulated space. We would continue to allow it to be that. So, I don't know if we would anticipate any material change state by state, depending on what happens. And for us on a national level, we really look at it as, you know, the demand for healthcare professionals over the intermediate to long term is a need that's going to happen regardless of political affiliation. And so we work very closely with our clients to help ensure that we're supporting them with all the data and facts they need.

Jeffrey Marc Silber: You know what I would say from a state standpoint, I think you are seeing.

Caroline Sullivan Grace: Some of the.

Caroline Sullivan Grace: It's a highly regulated space, we would continue for it to be that so I don't know if we would envision any material change state by state.

Caroline Sullivan Grace: Depending on what happens and for us on a national level.

Caroline Sullivan Grace: We really look at it as.

Caroline Sullivan Grace: The demand for health care professionals over the intermediate to long term.

Caroline Sullivan Grace: Is a need that's going to happen regardless of political affiliation and so we work very closely with our clients.

Caroline Sullivan Grace: To help ensure that we're supporting them with all the data in fact they need.

Jeffrey Marc Silber: I appreciate the call. Thanks so much. Thank you. One moment for the next question.

Speaker Change: Alright, I appreciate the color. Thanks, so much.

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

Operator: And our next question comes from Tobey Sommer of Truist Securities. Your line is open.

Jeffrey Marc Silber: And our next question comes from Tobey Sommer of <unk> Securities. Your line is open.

Tobey O'Brien Sommer: I wanted to ask you a question, as you work into the back half of the year, 3Q, 4Q, based on existing trends in the businesses. Will we get to a point where the growing businesses are sort of approximately equivalent from a revenue perspective to the travel nurse and associated businesses that are in decline? And if so, when do you see that happening? By my math, it's kind of early 4Q.

Operator: Thanks.

Tobey O'Brien Sommer: So as you work into the back half of the year through Q4 Q <unk>.

Tobey O'Brien Sommer: Based on existing trends in the businesses.

Tobey O'Brien Sommer: Get to a point, where the growing businesses are sort of.

Tobey O'Brien Sommer: Actually equivalent equivalent from a revenue perspective too.

Tobey O'Brien Sommer: The travel nurse and associated businesses that are in decline.

Tobey O'Brien Sommer: And if so when do you see that happening by my math.

Tobey O'Brien Sommer: Early <unk>.

Jeffrey R. Knudson: From a segment level, Tobey, I think Nurse and Allied would continue to be our largest segment, even in the back half of the year.

Tobey O'Brien Sommer: From a segment level and.

Jeffrey R. Knudson: From a segment level Tobey I think nurse and Allied would continue to be our largest segment even in the back half of the year.

Tobey O'Brien Sommer: Yeah, I'm actually just aggregating it in the businesses with the detail that you provide, you know, underneath the segment.

Jeffrey R. Knudson: I'm actually just aggregating it in the businesses with the detail that you provide underneath the segments.

Tobey O'Brien Sommer: Just looking at Travel Nurse. The businesses that are in

Tobey O'Brien Sommer: Just looking at travel nurse.

Tobey O'Brien Sommer: The businesses that are in decline, so the associated revenues with travel nursing that influence TWS, etc.

Tobey O'Brien Sommer: The businesses that are in decline so the associated revenues with travelers.

Tobey O'Brien Sommer: Influence gws et cetera.

Jeffrey R. Knudson: I think Travel Nurse would, you know, continue to be our largest business, and then even if you were to take the other two segments, in entirety, they would outpace Travel Nurse, but they wouldn't outpace Nurse and Allied.

Tobey O'Brien Sommer: I think travel nurse would continue to be our largest business and then even if you were to take.

Jeffrey R. Knudson: The other two segments.

Jeffrey R. Knudson: In entirety, they would outpace travel nurse, but they wouldn't outpaced the entire nurse and Allied segment.

Tobey O'Brien Sommer: Thanks. The allied modalities that you said are in decline, have the declines that you've experienced to date adjusted the mix sufficiently that the growing modalities can drive growth in the allied business, or do you still have declines and a mixed shift on a specialty basis that needs to occur before you can kind of see the segment revenue trend more influenced by those growing specialties?

Jeffrey R. Knudson: Okay.

Speaker Change: Yep the allied.

Tobey O'Brien Sommer: Modalities that you said are in decline.

Tobey O'Brien Sommer: Has the declines that you've experienced to date.

Tobey O'Brien Sommer: Adjusted the mix sufficiently that the growing modalities can drive growth in the allied business or do you still have declines and a mix shift on our specialty basis that needs to occur before you can.

Tobey O'Brien Sommer: Kind of seed.

Tobey O'Brien Sommer: <unk> segment revenue trend greater influenced by those growing specialties.

Jeffrey R. Knudson: Yeah, I think as we move through the back half of the year, you'll see the year over year comparisons for Allied improve, but it will probably be into 25 before we see growth within Allied on a year over year basis.

Speaker Change: Yes, I think as we move through the back half of the year Youll see the year over year.

Jeffrey R. Knudson: Comparisons for Allied improved.

Jeffrey R. Knudson: By Hayward, probably be into 'twenty five before we would see growth within allied on a year over year basis.

Tobey O'Brien Sommer: And then just a last, broad question for me: Kerry, from a reestablishing the sales force perspective and engaging with clients who hadn't kind of had an institutional dialogue with the firm for a while. Do you have an expectation that the company is going to be able to retake some share in travel nurse staffing? And I know that maybe doesn't won't matter until the market is sort of bottoming out, but I'm curious about your multi-year view on the market share trend. Yeah,

Speaker Change: And then just a last broad question for me.

Carey: Carey from AR.

Tobey O'Brien Sommer: Reestablishing the sales force perspective, and engaging with clients, who had kind of had an institutional dialogue with the firm for a while.

Tobey O'Brien Sommer: Do you have.

Tobey O'Brien Sommer: And expectation that the.

Tobey O'Brien Sommer: The company is going to be able to.

Tobey O'Brien Sommer: Re take some share in travel nurse staffing and I know that maybe doesn't doesn't matter until the market of course.

Tobey O'Brien Sommer: So the bottoms, but I'm curious what your multiyear view on the market share trends.

Caroline Sullivan Grace: Yeah, so the short answer is yes. If you look at, Tobey, the progress that we have made around really pitching ourselves against the entirety of the market, we are seeing early signs of success. And so from a sales standpoint, almost half of our sales pipeline is in vendor neutral, where we really closed down sales during the pandemic and had been largely even from a sales standpoint focused on our MSP clients.

Tobey O'Brien Sommer: Yeah.

Caroline Sullivan Grace: So the short answer is yes.

Caroline Sullivan Grace: If you look at Toby the progress that we have made around really post pandemic.

Caroline Sullivan Grace: Pinching ourselves against the entirety of the market.

Caroline Sullivan Grace: We are seeing early signs of success and so from a sales standpoint.

Caroline Sullivan Grace: Almost half of our sales pipeline.

Caroline Sullivan Grace: As in vendor neutral, where we really closed down sales during the pandemic and have been largely even from a sales standpoint focused on our MSP clients.

Caroline Sullivan Grace: You've seen us, and I mentioned one of our partners in my opening comments, make substantial progress around how we reestablish those partnerships that had not been our emphasis during the pandemic. So all of those initiatives that we are already seeing early success signs on, we would expect to continue throughout the year and into 2025. The biggest challenge for us is all of that progress is being really more than overshadowed just by an industry-wide demand reset in Travel Nurse.

Caroline Sullivan Grace: You've seen us nine mentioned.

Caroline Sullivan Grace: One of our partners in my opening comments, you've seen us in the past couple of quarters make substantial progress around how we reestablished those partnerships.

Caroline Sullivan Grace: That had not been our emphasis during the pandemic so.

Caroline Sullivan Grace: All of those.

Caroline Sullivan Grace: This statistic that we are already seeing early success signs on we would expect to continue.

Caroline Sullivan Grace: Throughout the year and into 2025, the biggest challenge for US is all of that progress is being really more than overshadowed just by an industry wide demand reset in travel nurse. So.

Caroline Sullivan Grace: So you saw that in the conversation we had, we are very fortunate to have a diversified set of solutions, which certainly helps us as Travel Nurse goes through this industry-wide demand reset. And for us, the early successful outcomes that we're having around really, again, pitching ourselves against the entire market, we would expect to really position us well as demand comes back. Thank you very much.

Caroline Sullivan Grace: You saw that in the conversation we had we have a we are very fortunate to have a diversified set of solutions, which certainly helps us.

Caroline Sullivan Grace: Travel nurse goes through this industry wide demand reset.

Caroline Sullivan Grace: And for US the early <unk>.

Caroline Sullivan Grace: Outcomes that we're having around really again hitching ourselves against the entire market we.

Caroline Sullivan Grace: We would expect to hit to really position us well as demand comes back.

Caroline Sullivan Grace: Thank you very much.

Tobey O'Brien Sommer: Thank you. One moment for our next question, and our next question comes from Konstantin Devitis of Citizens JMP. Your line is open.

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

Konstantin Devitis: And our next question comes from Constantine Davita physician JMP. Your line is open.

Konstantin Devitis: Hi, just a couple of follow-ups to some of the earlier questions and maybe... Starting with locums, how much does having a scaled-up locums franchise help you compete for maybe, you know, MST, MSP-type opportunities, or is locum still very much a separate sort of engagement?

Konstantin Devitis: Hi, just a couple follow ups to some of the earlier questions and maybe.

Konstantin Devitis: Starting with <unk>, how much does having a scaled up locums franchise help you.

Konstantin Devitis: So maybe MSP MSP type opportunities or as locums still very much a separate sort of engagement.

Caroline Sullivan Grace: I would say having the added capabilities that MSDR has, in addition to the capabilities that we already had, has strengthened our positioning in the overall market and certainly our ability to go after locum MSPs more completely.

Konstantin Devitis: I would say, having the added capabilities that MSP or had an addition, too.

Caroline Sullivan Grace: The capabilities that we already had has strengthened our positioning in the overall market.

Caroline Sullivan Grace: And certainly our ability to more completely.

Caroline Sullivan Grace: Go after Locums MSP.

Caroline Sullivan Grace: We also are having early success talking to our existing clients around expanded capabilities. So, if we have an existing client who's using us for nursing, for nursing and allied, how do we add locum capabilities? Importantly, with the rollout of shift wise flex, our new generation vendor management system, we can support nurse, allied, and locum, as well as clinical and non-clinical positions. So there's a number of things that we have done to enhance our capabilities and ability to effectively position ourselves competitively in that.

Caroline Sullivan Grace: We also are have.

Caroline Sullivan Grace: <unk> early success.

Caroline Sullivan Grace: And talking to our existing clients around expanded capabilities. So if we have an existing client who is using us for nurse or nurse and allied how we add locums capabilities importantly, with our rollout of ship twice slacks.

Caroline Sullivan Grace: Our our new generation vendor management system, we can support.

Caroline Sullivan Grace: First allied and Locums as well as clinical non clinical position so.

Caroline Sullivan Grace: Theres a number of things that we have done to enhance our capabilities and ability to effectively position ourselves competitively in that space.

Konstantin Devitis: Got it. And then, you know, I know you talk about sort of smaller systems, larger systems. In terms of travel, nursing, and kind of where they are and progress towards reducing contingent labor spend, can you give us some sense for just how your book of business might be bifurcated along those lines?

Speaker Change: Got it.

Konstantin Devitis: And then.

Konstantin Devitis: I know you talk about sort of smaller system larger systems.

Konstantin Devitis: In terms of travel nursing and kind of where they are in.

Konstantin Devitis: Progress towards reducing contingent labor spend.

Konstantin Devitis: Can you give us some sense for just how your book of business might be bifurcated along those lines.

Konstantin Devitis: against large and smaller? That's right.

Konstantin Devitis: Against the margin and smaller.

Caroline Sullivan Grace: Think of it as we serve, you know, the largest health systems, and we also serve the smallest. And so your MSP clients probably tend a bit towards some of the larger ones. And I think, Constantine, the real question when you're looking at, you know, where are you going to see all of this, you know, kind of find the equilibrium? I think there's going to be a couple of pieces on that. One is, while the majority of our largest clients are at or below their targets, you need to start seeing growth from where they are.

Konstantin Devitis: Right.

Caroline Sullivan Grace: Think of it as we serve.

Caroline Sullivan Grace: Yes.

Caroline Sullivan Grace: The largest health systems, and we ought to serve.

Caroline Sullivan Grace: The smallest and so your MSP clients, probably turned a bit towards.

Caroline Sullivan Grace: Some of the larger and I think Constantine the real question when Youre looking at where are you going to see all of this kind of find the equilibrium.

Caroline Sullivan Grace: I think theres going to be a couple of pieces on that one is.

Caroline Sullivan Grace: While the majority of our largest clients have are at or below their target.

Caroline Sullivan Grace: You need to start seeing growth off of where they are and then you need to see some of these other clients who have typically lags the largest clients one or two quarters find their bottom and so.

Caroline Sullivan Grace: And then you need to see some of these other clients who typically lagged, the largest clients, by one or two quarters, find their bottom. And so there are a number of different outcomes about where you could find the equilibrium, depending on those two pieces. But those are the conditions that we're really monitoring.

Caroline Sullivan Grace: There's a number of different outcomes around where you could find that equilibrium depending on those two pieces, but those are those are the conditions that we're really monitoring.

Caroline Sullivan Grace: Thanks.

Operator: Thank you. One moment for our next question. And our next question comes from Bill Sutherland of The Benchmark Company. Your line is open. Thank you. Hello, everybody.

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

Operator: And our next question comes from Bill Sutherland of Benchmark Company. Your line is open.

William Sutherland: Thank you. Hello, everybody. On education, I'm hearing the K-12 contracting activity is pretty strong for the 24-25 year. Have you been seeing a lot of activity?

William Sutherland: Thank you Hello, everybody.

William Sutherland:

William Sutherland: <unk>.

William Sutherland: Hearing the <unk>.

William Sutherland: K through 12 contracting activity is pretty strong for the 'twenty four 'twenty five year has been have you been seeing a lot of activity.

William Sutherland: Sure.

Jeffrey R. Knudson: Yeah, we have Bill. I think that business was 20% for us, quarter over quarter, or excuse me, year over year, in the first quarter, and we would expect that growth to continue. And that growth is coming not only from on-site clinicians, but also through teletherapy for us, which is growing faster than the overall 20%.

William Sutherland: Yes, we have bill I think that business was up 20% for us.

Jeffrey R. Knudson: Quarter over quarter.

Jeffrey R. Knudson: Our excuse me year over year in the first quarter and we would expect that.

Jeffrey R. Knudson: That growth to continue and that that growth is coming not only from on site clinicians, but also through teletherapy for us which is growing.

Jeffrey R. Knudson: Faster than the overall, 20% rate.

William Sutherland: So you can look into the next school year and kind of see that. Amen. We would expect it to, yes. Yeah, that's great. And then, Kerry, on interim management improving right now, we're starting to turn things around. I'm thinking about how the hospital's financial condition is also, you know, not completely. I mean, you do have your stewards out there, but I'm just kind of curious why Interim's kicking in now, thinking about the backdrop.

Jeffrey R. Knudson: So you can look into the next school year kind of see that sustainable.

William Sutherland: We would expect it to yes, yes, that's great and then.

William Sutherland: Carry on on the interim management improving right now.

William Sutherland: To turn up.

William Sutherland: I'm thinking about how the hospital financial condition is also.

William Sutherland: Not completely I mean, you do have good stewards out there but.

William Sutherland: Im just kind of curious why interims kicking up now thinking about the backdrop.

Caroline Sullivan Grace: I think what we saw in the interim, and we're still seeing a bit in terms of permanent search, is the same type of cost management that you experienced and that we were talking about in the travel nurse business also impacted those businesses. So if you could hold off on hiring an interim leader, then you saw that happen last year. I think, again, against the backdrop of, from a macro standpoint, the continued expectation of patient demand increasing, you're seeing a number of our clients now go back and look at ensuring that they're staffed from a leadership perspective.

Kerry: I think what we saw in interim and we're still seeing a bit in.

Caroline Sullivan Grace: In terms of permanent search is the same type of cost management that you experienced in that we were talking about in.

Caroline Sullivan Grace: The travel nurse business also impacted those businesses. So if you could hold off on.

Caroline Sullivan Grace: Hiring an interim leader then you saw that happen last year I think.

Caroline Sullivan Grace: Again against the backdrop of from a macro standpoint.

Caroline Sullivan Grace: The continued expectation of patient demand increasing.

Caroline Sullivan Grace: Youre seeing a number of our clients now go back and look at <unk>.

Caroline Sullivan Grace: Ensuring that they're staffed from a leadership standpoint.

Jeffrey R. Knudson: Yeah, Bill, I would just say, you know, even though we saw an improvement in the trends sequentially, the business was down 25% year over year. But I would say, encouragingly to us, that the stabilization that we saw both on the price and the volume within the interim was the first time we had seen that quarter over quarter since the second half of 2020.

Speaker Change: Yes, Bill I would just say, even though we saw an improvement in the trend sequentially. The business was it was down 25% year over year.

Jeffrey R. Knudson: But I would say encouragingly to us.

Jeffrey R. Knudson: The stabilization that we saw both on the price and the volume within interim was the first time, we had seen that quarter over quarter since the second half of 'twenty two.

William Sutherland: Thanks for the call. Thank you. One moment for our next question.

Bill: Got it thanks for the color.

William Sutherland: Thank you one moment for our next question.

Operator: And our next question comes from Andre Childress of Baird. Your line is open.

William Sutherland: And our next question comes from Andre Childress of Baird. Your line is open.

Andre A. Childress: Hey, this is Andre from Mark Marcon. Thank you for taking our questions. My first question is just to follow on from some of the comments you guys had earlier about some of the clients, you know, lagging about a quarter or two from the other clients, the larger clients that have kind of more so reset to normalize or targeted levels. But among the MSP clients that aren't back to those targeted levels, how much further do they have to go to get to those targeted levels? If you could, you know, the provider range that's like 5% or 15 or 20%. And then also, how many MSD clients are now dipping below those targets?

Andre A. Childress: Hey, this is on the wall for Mark Mark Collin. Thank you for taking our questions. My first question just a follow on to some of the comments you guys had earlier about some of the clients lagging about a quarter or two from the other clients of the larger clients that kind of more so reset normalize our targeted levels, but among the <unk>.

Andre A. Childress: SP clients.

Andre A. Childress: Arent back to those targeted levels how much further do they have to go to get to those targeted levels. If you could.

Andre A. Childress: Provide a range of 5% or 15% to 20%.

Andre A. Childress: And then also how many MSP clients are now dipping below those targeted levels.

Caroline Sullivan Grace: We've had some of our clients... go below their targeted levels, you know, and that has already happened in some cases. I don't know that I have a number to say somebody's kind of 5% or more than that.

Andre A. Childress: We've had some of our clients.

Caroline Sullivan Grace: Below their targeted levels.

Caroline Sullivan Grace: That already happened in some cases.

Caroline Sullivan Grace: I don't know that I have a number to say somebody kind of 5% of our or more than that.

Caroline Sullivan Grace: What I would say is that, and we saw this last year, the largest systems really led the way in getting back to, I'd say, a more normalized workforce structure, and the smaller organizations, you know, just got a later start in some. And we have, you know, some that don't have, you know, a targeted goal and they're just looking at what's happening from a patient demand standpoint and making decisions about how they I think that the important thing that we talk to clients about, again, because we help them optimize against their total workforce, is that coming off of the normalization we've seen around contingent labor in the past year, you're really heading into a period where the premium over contingent labor over fully loaded cost has been getting into normal levels.

Caroline Sullivan Grace: What I would say is we saw and we saw this last year, we saw the largest systems really lead the way.

Caroline Sullivan Grace: And getting back to I'd say more normalized.

Caroline Sullivan Grace: Workforce structure.

Caroline Sullivan Grace: And the smaller organizations.

Caroline Sullivan Grace: Just got a later start in some cases.

Caroline Sullivan Grace: And we have.

Caroline Sullivan Grace: Some that don't have.

Caroline Sullivan Grace: Targeted goal.

Caroline Sullivan Grace: And they're just looking at what's happening from a patient demand standpoint, and and making decisions about how they restructure their workforce.

Caroline Sullivan Grace: I think the important thing that we talk to clients about again, because we help them optimize against their total workforce is.

Caroline Sullivan Grace: Coming off of the normalization, we've seen around contingent labor the past year, you really heading into a period, where the premium.

Caroline Sullivan Grace: Over contingent labor over fully loaded cost.

Speaker Change: It has been getting into normal levels, and we expect it by the end of the year to be there.

Caroline Sullivan Grace: And we expect it by the end of the year to be there based on what's happened with bill rates and also what's happened to embedded cost rises in permanent labor. So, the conversation is, I say, kind of getting back to what's the most effective way for me to staff my organization, and that looks a little bit different this year than it did this time last year.

Caroline Sullivan Grace: Based on what's happened with Bill rates and also what's happened to embedded cost rises and permanent labor. So the conversation is I would say kind of getting back to what's the most effective way for me to ask my organization.

Caroline Sullivan Grace: And that looks a little bit different this year than it did this time last year.

Andre A. Childress: Great, thank you for all that color. And then, as a quick follow-up, you mentioned a lot of the improvements from a technology perspective, and I know, Kerry, that's been a big point of emphasis since you joined. And you also mentioned that that's been a lot bigger point of emphasis among clients as they're looking for tech-enabled solutions. So could you provide a little bit more of an update in terms of where you are on that journey on a technology modernization front, or what innings do you think you are in, and what are some of the things that you are most excited about? Thank you.

Speaker Change: Great. Thank you for all that color and then as a quick follow up you mentioned a lot of the improvements from a technology perspective, and I know Kerry that's been a big point of emphasis since you joined.

Andre A. Childress: And you also mentioned that Thats been a lot bigger.

Andre A. Childress: Point of emphasis among clients that theyre looking for tech enabled solutions. So could you just provide a little bit more of an update in terms of where you are on that journey on the technology modernization front or what inning do you view your and what are the some of the things that you are most excited about thank you.

Caroline Sullivan Grace: Well, gosh, I guess the baseball season is starting now that we're kind of in the innings. We feel very good about what we have delivered over the past year. And I'll start with ShiftWise Flex, which is the new generation of our VMS. We are at the end of this quarter almost 40 percent complete based on spend under management with our clients. That the rollout has gone very well. We expect to have the majority complete by the end of the year.

Speaker Change: Well gosh I guess baseball season is starting now that.

Caroline Sullivan Grace: We're kind of in earnings we feel very good about.

Caroline Sullivan Grace: And so ShiftWise Flex has been a big positive, both in terms of our current clients and for prospects, because it can support the entire clinician base, like I talked about earlier. And we've also integrated it into our mobile app so that we can support internal float pools and a number of other capabilities that are very important to our clients. So I put ShiftWise Flex at the top of the list.

Caroline Sullivan Grace: What we have delivered over the past year and I'll start with <unk>.

Caroline Sullivan Grace: <unk> flex, which is the new generation of our <unk>.

Caroline Sullivan Grace: We are at the end of this quarter almost 40% complete based on spend under management with our client.

Caroline Sullivan Grace: That that rollout has gone very well, we expect to be.

Caroline Sullivan Grace: The majority completed by the end of the year and so <unk> flex has been a.

Caroline Sullivan Grace: Big positive both in terms of for our current clients as well as for prospects because it can support the entire clinician base like I talked about earlier and we've also integrated into our mobile app. So that we can support internal float pools and a number of other capabilities that are very important to our clients. So I would say.

Caroline Sullivan Grace: <unk> flex at.

Caroline Sullivan Grace: We've done a significant amount of automation around our order to fill process. We talked about the stats that we've already achieved, which is that we've reduced our time by half. That has led to both increased clinician as well as client satisfaction. And we also saw an increase in our internal capture rate, quarter over quarter. And while we're not back to our internal capture rates pre-COVID, the progress that we made quarter over quarter was very validation for us.

Caroline Sullivan Grace: At the top of the list we've done a significant amount of automation around our order to Phil we talked about the stat that we've already achieved which is we've reduced our time by half.

Caroline Sullivan Grace: That has led to.

Caroline Sullivan Grace: Both increased clinician as well as client satisfaction, and we also saw quarter over quarter and increased and our internal capture.

Caroline Sullivan Grace: And while we're not back to our internal capture rates pre COVID-19.

Caroline Sullivan Grace: The progress that we made quarter over quarter was very.

Caroline Sullivan Grace: Validating for us.

Caroline Sullivan Grace: And the work that we've done, both operationally and from a technology standpoint. And then another big thing that we've done is that we are almost complete with the integration of all of our brands into AMN. And that's more than a logo. We have a front door in our mobile app called Passport for all of our clinicians. And we have an ability for our clients and our clinicians to be able to experience the breadth of AMN, both in terms of our solutions and offerings, but for our clinicians, the number of jobs. So we will continue to make a lot of progress to support our clients in a tech-enabled way.

Caroline Sullivan Grace: The work that we've done both operationally and from a technology standpoint.

Andre A. Childress: Great! Thank you so much.

Caroline Sullivan Grace: And then another big thing that we've done is we are almost complete with the integration of all of our brands into a amen.

Operator: Thank you. I'm showing no further questions at this time. I'd like to turn it back to Carrie Grace for closing remarks.

Andre A. Childress: It's more than a logo that is we have a front door in our mobile app called passport for all of our clinicians.

Operator: And we have an ability for our clients and our clinicians to be able to experience the breadth of Amgen both in terms of our solutions offerings, but for our clinicians the number of jobs. So.

Operator: We will continue to make a lot of progress to support our clients.

Operator: In a tech enabled way.

Caroline Sullivan Grace: Great. Thank you so much.

Caroline Sullivan Grace: Thank you I'm showing no further questions at this time I would like to turn it back to Kerry Grace for closing remarks.

Caroline Sullivan Grace: Thank you, operator. We appreciate your interest in AMN, and on behalf of everyone at this fabulous company, we wish all of our nurses a happy Nurses Month and thank you to all of our AMN team members for their tireless work supporting our clients and clinicians in delivering quality care.

Caroline Sullivan Grace: Thank you operator, we appreciate your interest in Ameren and on behalf of everyone. At this Fabulous company, we wish all of our nurses are happy nurses month.

Caroline Sullivan Grace: And thank you to all of our <unk> team members for their tireless work supporting our clients and clinicians and delivering quality care.

Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.

Speaker Change: This concludes today's conference call. Thank you for participating and you may now disconnect.

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