AMN HEALTHCARE SERVICES INC

Previous wording

We provide technology-enabled healthcare workforce solutions and staffing services to healthcare organizations across the nation. The Company provides access to a comprehensive network of healthcare professionals through its recruitment strategies and breadth of career opportunities. The Company helps providers optimize their workforce to reduce complexity and increase efficiency. The Company’s total talent solutions include vendor neutral and managed services programs, clinical and interim healthcare leaders, temporary staffing, permanent placement, executive search, vendor management systems, recruitment process outsourcing, predictive modeling, language services, revenue cycle solutions, and other services. Clients include acute-care hospitals, community health centers and clinics, physician practice groups, retail and urgent care centers, home health facilities, schools and many other healthcare settings.

Current wording

We provide technology-enabled healthcare workforce solutions and staffing services to healthcare organizations across the nation. The Company provides access to a comprehensive network of healthcare professionals through its recruitment strategies and breadth of career opportunities. We help providers optimize their workforce to reduce complexity and increase efficiency. Our total talent solutions include vendor neutral and managed services programs, clinical and interim healthcare leaders, temporary staffing, permanent placement, executive search, vendor management systems, recruitment process outsourcing, predictive modeling, language services, revenue cycle solutions, and other services. Our diverse client base includes acute-care hospitals, community health centers and clinics, physician practice groups, retail and urgent care centers, home health facilities, schools, inpatient/outpatient rehabilitation facilities, ambulatory care facilities, outpatient surgical facilities, and many other healthcare settings.

Previous wording

We conduct business through three reportable segments: (1) nurse and allied solutions, (2) physician and leadership solutions, and (3) technology and workforce solutions. For the three months ended September 30, 2024, we recorded revenue of $687.5 million, as compared to $853.5 million for the same period last year. For the nine months ended September 30, 2024, we recorded revenue of $2,249.1 million, as compared to $2,971.0 million for the same period last year.

Current wording

We conduct business through three reportable segments: (1) nurse and allied solutions, (2) physician and leadership solutions, and (3) technology and workforce solutions. For the three months ended March 31, 2025, we recorded revenue of $689.5 million, as compared to $820.9 million for the same period last year.

Previous wording

Nurse and allied solutions segment revenue comprised 60% and 70% of total consolidated revenue for the nine months ended September 30, 2024 and 2023, respectively. Through our nurse and allied solutions segment, we provide hospitals, other healthcare facilities, and schools with a comprehensive set of staffing solutions, including direct, vendor neutral, and managed services solutions in which we manage and staff all the temporary and permanent nursing and allied staffing needs, as well as the revenue cycle management needs, of a client. A majority of our placements in this segment are under our managed services solution.

Current wording

Nurse and allied solutions segment revenue comprised 60% and 63% of total consolidated revenue for the three months ended March 31, 2025 and 2024, respectively. Through our nurse and allied solutions segment, we provide hospitals, other healthcare facilities, and schools with a comprehensive set of staffing solutions, including direct, vendor neutral, and managed services solutions in which we manage and staff all the temporary and permanent nursing and allied staffing needs, as well as the revenue cycle management needs, of a client. A majority of our placements in this segment are under our managed services solution.

Previous wording

Physician and leadership solutions segment revenue comprised 25% and 17% of total consolidated revenue for the nine months ended September 30, 2024 and 2023, respectively. Through our physician and leadership solutions segment, we place physicians of all specialties, as well as dentists and advanced practice providers, with clients on a temporary basis, generally as independent contractors. We also recruit physicians and healthcare leaders for permanent placement and place interim leaders and executives across all healthcare settings. The interim healthcare leaders and executives we place are typically placed on contracts with assignment lengths ranging from a few days to one year.

Current wording

Physician and leadership solutions segment revenue comprised 25% and 23% of total consolidated revenue for the three months ended March 31, 2025 and 2024, respectively. Through our physician and leadership solutions segment, we place physicians of all specialties, as well as dentists and advanced practice providers, with clients on a temporary basis, generally as independent contractors. We also recruit physicians and healthcare leaders for permanent placement and place interim leaders and executives across all healthcare settings. The interim healthcare leaders and executives we place are typically placed on contracts with assignment lengths ranging from a few days to one year.

Previous wording

Technology and workforce solutions segment revenue comprised 15% and 13% of total consolidated revenue for both of the nine months ended September 30, 2024 and 2023, respectively. Through our technology and workforce solutions segment, we provide hospitals and other healthcare facilities with a range of workforce solutions, including: (1) language services, (2) software-as-a-service (“SaaS”)-based VMS technologies through which our clients can self-manage the procurement of contingent clinical labor and their internal float pool, (3) workforce optimization services that include consulting, data analytics, predictive modeling, and SaaS-based scheduling technology, and (4) recruitment process outsourcing services in which we recruit, hire and/or onboard permanent clinical and nonclinical positions on behalf of our clients.

Current wording

Technology and workforce solutions segment revenue comprised 15% and 14% of total consolidated revenue for the three months ended March 31, 2025 and 2024, respectively. Through our technology and workforce solutions segment, we provide hospitals and other healthcare facilities with a range of workforce solutions, including: (1) language services, (2) software-as-a-service (“SaaS”)-based VMS technologies through which our clients can self-manage the procurement of contingent clinical labor and their internal float pool, (3) workforce optimization services that include consulting, data analytics, predictive modeling, and SaaS-based scheduling technology, and (4) recruitment process outsourcing services in which we recruit, hire and/or onboard permanent clinical and nonclinical positions on behalf of our clients.

Previous wording

Since the COVID-19 pandemic subsided, healthcare organizations have aggressively hired permanent staff and focused on cost containment and alternative staffing models that enabled them to reduce utilization of contingent labor. As a result, demand in our travel nurse business declined significantly and continues to remain below pre-pandemic levels. During the second quarter and through the third quarter, we have seen an increase in demand as measured by open orders, although it has not yet been realized in travelers on assignment. In our allied staffing business, demand continues to be above pre-pandemic levels and was up slightly on a quarter-over-quarter basis and was up significantly year over year primarily from high demand in therapy and imaging.

Current wording

Following the subsidence of the COVID-19 pandemic, healthcare organizations have prioritized hiring permanent staff and implementing cost containment measures, along with alternative staffing models to reduce utilization of contingent labor. As a result, demand in our travel nurse business has declined significantly and remains below pre-pandemic levels. During the first quarter, we saw a seasonal decrease in demand compared to the fourth quarter of last year as measured by open orders, which was generally in line with pre-pandemic normal seasonal trends. In addition, we have seen an increase in travel nurse open orders on a year-over-year basis, suggesting continued normalization in the industry. In our allied staffing business, demand continues to exceed pre-pandemic levels. In the first quarter, we saw an increase in demand compared to the previous quarter, with a significant increase year-over-year primarily driven by high demand in therapy and imaging specialties.

Previous wording

For our nurse and allied solutions segment, in the third quarter we saw a decrease in overall staffing volume from prior year due to lower travel nurse demand in the second quarter and visa retrogression impacting international nurse staffing. Compared to the prior quarter, the average number of travelers on assignment in the third quarter was down due to the lower demand environment earlier in the year and schools seasonality. Bill rates in the third quarter were down modestly from the second quarter due to seasonal trends and continued client focus on cost savings.

Current wording

For our nurse and allied solutions segment, in the first quarter we saw a slight decrease in overall staffing volume from the prior quarter, largely due to visa retrogression affecting international nurse staffing. Compared to the prior year, the average number of travelers on assignment in the first quarter decreased due to the lower demand environment leading into the quarter. Bill rates in the first quarter increased slightly from the prior quarter, stabilizing over the past several quarters.

Previous wording

In our physician and leadership solutions segment, demand for our locum tenens staffing business declined from the prior year though it was higher compared with the prior quarter. Certified registered nurse anesthetists (CRNAs) continue to be the largest specialty for our locum tenens staffing business. Revenue per day filled increased in the third quarter as compared to the prior year. Demand for our interim leadership and search businesses continues to be below prior year as some healthcare organizations defer hiring decisions or increase insourcing.

Current wording

In our physician and leadership solutions segment, demand for our locum tenens staffing business in the first quarter declined compared to both the prior year and prior quarter. Certified registered nurse anesthetists (CRNAs) remain the largest specialty within our locum tenens staffing business. Revenue per day filled increased in the first quarter relative to both the prior year and prior quarter. In the first quarter, demand for our interim leadership and search businesses was lower than the previous year, impacted by healthcare organizations deferring hiring decisions or increasing insourcing.

Previous wording

In our technology and workforce solutions segment, our language services business continued to experience an increase in minutes from our existing clients and growth from new clients. Volumes in our VMS business followed similar trends as our travel nurse business as compared to the prior year. VMS bill rates in the third quarter were down sequentially and year over year.

Current wording

In our technology and workforce solutions segment, minutes in our language services business in the first quarter grew from the prior year and was consistent with the prior quarter. Volumes in our VMS business followed similar trends in our travel nurse business as compared to the prior year, with the sequential decline higher than travel nurse due to winter order seasonality in the travel nurse business. VMS bill rates in the first quarter decreased both sequentially and year-over-year.

Previous wording

The preparation of our consolidated financial statements in conformity with United States generally accepted accounting principles (“U.S. GAAP”) requires us to make estimates and judgments that affect our reported amounts of assets and liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to intangible assets purchased in a business combination, asset impairments, accruals for self-insurance, compensation and related benefits, accounts receivable, contingencies and litigation, contingent consideration (“earn-out”) liabilities associated with acquisitions, and income taxes. We base these estimates on the information that is currently available to us and on various other assumptions that we believe are reasonable under the circumstances. Actual results could vary from these estimates under different assumptions or conditions. If these estimates differ significantly from actual results, our consolidated financial statements and future results of operations may be materially impacted. There have been no material changes in our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in our 2023 Annual Report.

Current wording

The preparation of our consolidated financial statements in conformity with United States generally accepted accounting principles (“U.S. GAAP”) requires us to make estimates and judgments that affect our reported amounts of assets and liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to intangible assets purchased in a business combination, asset impairments, accruals for self-insurance, compensation and related benefits, accounts receivable, contingencies and litigation, contingent consideration (“earn-out”) liabilities associated with acquisitions, and income taxes. We base these estimates on the information that is currently available to us and on various other assumptions that we believe are reasonable under the circumstances. Actual results could vary from these estimates under different assumptions or conditions. If these estimates differ significantly from actual results, our consolidated financial statements and future results of operations may be materially impacted. There have been no material changes in our critical accounting policies and estimates, other than the adoption of the Accounting Standard Update (“ASU”) described in the accompanying Note (1), “Basis of Presentation,” as compared to the critical accounting policies and estimates described in our 2024 Annual Report.

Previous wording

The following table sets forth, for the periods indicated, selected unaudited condensed consolidated statements of operations data as a percentage of revenue. Our results of operations include three reportable segments: (1) nurse and allied solutions, (2) physician and leadership solutions, and (3) technology and workforce solutions. The MSDR acquisition impacts the comparability of the results between the three and nine months ended September 30, 2024 and 2023. See additional information in the accompanying Note (2), “Acquisitions.” Our historical results are not necessarily indicative of our future results of operations.

Current wording

The following table sets forth, for the periods indicated, selected unaudited condensed consolidated statements of operations data as a percentage of revenue. Our results of operations include three reportable segments: (1) nurse and allied solutions, (2) physician and leadership solutions, and (3) technology and workforce solutions. Our historical results are not necessarily indicative of our future results of operations.

Previous wording

Revenue. Revenue decreased 19% to $687.5 million for the three months ended September 30, 2024 from $853.5 million for the same period in 2023, attributable to a decline in organic revenue across our segments with the greatest decline in our nurse and allied solutions segment.

Current wording

Revenue. Revenue decreased 16% to $689.5 million for the three months ended March 31, 2025 from $820.9 million for the same period in 2024, attributable to a decline in organic revenue across our segments with the greatest decline in our nurse and allied solutions segment. Revenue broken down among the reportable segments is as follows:

Previous wording

Nurse and allied solutions segment revenue decreased 30% to $399.4 million for the three months ended September 30, 2024 from $573.4 million for the same period in 2023. The $174.0 million decrease was primarily attributable to a 24% decrease in the average number of travelers on assignment, an approximately 8% decrease in the average bill rate, and a less than 1% decrease in average billable hours.

Current wording

Nurse and allied solutions segment revenue decreased 20% to $413.3 million for the three months ended March 31, 2025 from $519.3 million for the same period in 2024. The $106.0 million decrease was primarily attributable to a $111.7 million decline driven by a 22% decrease in the average number of travelers on assignment, a $24.3 million decline driven by an approximately 5% decrease in the average bill rate, and a $5.7 million decline driven by a 1% decrease in average billable hours. The overall decrease was partially offset by a $39.0 million increase in labor disruption revenue.

Previous wording

Physician and leadership solutions segment revenue increased 13% to $180.6 million for the three months ended September 30, 2024 from $159.6 million for the same period in 2023. The $21.0 million increase was attributable to higher revenue in our locum tenens business, which was partially offset by lower revenue in our interim leadership, physician permanent placement and executive search businesses. Revenue in our locum tenens business grew $29.2 million (or 26%) during the three months ended September 30, 2024 primarily due to additional revenue of $32.8 million in connection with the MSDR acquisition and a 5% increase in the revenue per day filled on an organic basis, partially offset by an 8% decrease in the number of days filled on an organic basis. Our interim leadership business experienced a decline of $2.0 million (or 7%) and our physician permanent placement and executive search businesses declined $6.1 million (or 38%) during the three months ended September 30, 2024, primarily due to lower demand.

Current wording

Physician and leadership solutions segment revenue decreased 8% to $174.1 million for the three months ended March 31, 2025 from $188.8 million for the same period in 2024. The $14.7 million decrease was attributable to declines in revenue of our businesses across the segment. Revenue in our locum tenens business declined $4.4 million (or 3%) during the three months ended March 31, 2025 primarily due to a $14.1 million decline driven by a 10% decrease in the number of days filled, partially offset by a $9.7 million increase driven by a 7% increase in the revenue per day filled. Our interim leadership business experienced a decline of $6.5 million (or 21%) and our physician permanent placement and executive search businesses declined $3.9 million (or 29%) during the three months ended March 31, 2025, primarily due to lower demand.

Previous wording

Technology and workforce solutions segment revenue decreased 11% to $107.5 million for the three months ended September 30, 2024 from $120.5 million for the same period in 2023. The $13.0 million decrease was primarily attributable to a decline within our VMS and outsourced solutions businesses, partially offset by growth within our language services business. Revenue for our VMS business declined $13.1 million (or 34%) for similar reasons as nurse and allied solutions segment revenue and our outsourced solutions business experienced a decline of $8.4 million (or 77%) primarily due to lower demand, while our language services business grew $8.6 million (or 13%) primarily due to a 15% increase in minutes during the three months ended September 30, 2024.

Current wording

Technology and workforce solutions segment revenue decreased 9% to $102.2 million for the three months ended March 31, 2025 from $112.8 million for the same period in 2024. The $10.6 million decrease was primarily attributable to a decline within our VMS and outsourced solutions businesses, partially offset by growth within our language services business. Revenue for our VMS business declined $9.7 million (or 33%) for similar reasons as nurse and allied solutions segment revenue and our outsourced solutions business experienced a decline of $3.5 million (or 54%) primarily due to lower demand, while our language services business grew $3.5 million (or 5%) primarily due to an 8% increase in minutes during the three months ended March 31, 2025.

Previous wording

For the three months ended September 30, 2024 and 2023, revenue under our MSP arrangements comprised approximately 44% and 51% of our consolidated revenue, 68% and 70% of our nurse and allied solutions segment revenue, 15% and 19% of our physician and leadership solutions segment revenue, and 3% and 2% of our technology and workforce solutions segment revenue, respectively.

Current wording

For the three months ended March 31, 2025 and 2024, revenue under our MSP arrangements comprised approximately 44% and 48% of our consolidated revenue, 65% and 70% of our nurse and allied solutions segment revenue, 18% and 13% of our physician and leadership solutions segment revenue, and 3% and 3% of our technology and workforce solutions segment revenue, respectively.

Previous wording

Cost of Revenue. Cost of revenue, which consists predominantly of compensation, benefits, housing, travel and allowance costs for healthcare professionals and medically qualified interpreters, decreased 16% to $474.5 million for the three months ended September 30, 2024 from $564.0 million for the same period in 2023. The $89.5 million decrease was attributable to a decline in our nurse and allied solutions segment, partially offset by increases in our physician and leadership solutions and technology and workforce solutions segments. The decrease in our nurse and allied solutions segment was primarily attributable to a $115.7 million decrease in clinician pay package costs, including housing, travel and allowances, primarily due to the aforementioned decrease in the average number of travelers on assignment. The increase in our physician and leadership solutions segment was driven by a $23.3 million increase in clinician pay package costs, primarily due to the MSDR acquisition. The increase in our technology and workforce solutions segment was primarily attributable to $2.7 million of higher compensation and benefits primarily due to the aforementioned increase in minutes in our language services business. Cost of revenue broken down among the reportable segments is as follows:

Current wording

Cost of Revenue. Cost of revenue, which consists predominantly of compensation, benefits, housing, travel and allowance costs for healthcare professionals and medically qualified interpreters, decreased 13% to $491.4 million for the three months ended March 31, 2025 from $563.4 million for the same period in 2024. The $72.0 million decrease was mainly attributable to decreases in our nurse and allied solutions and physician and leadership solutions segments. The decrease in our nurse and allied solutions segment was primarily attributable to a $67.2 million decrease in clinician pay package costs, including housing, travel and allowances, primarily due to the aforementioned decrease in the average number of travelers on assignment. The decrease in our physician and leadership solutions segment was driven by a $2.6 million decrease in clinician pay package costs, primarily due to declines in demand. The increase in our technology and workforce solutions segment was primarily attributable to $0.3 million of higher compensation and benefits primarily due to the aforementioned increase in minutes in our language services business. Cost of revenue broken down among the reportable segments is as follows:

Previous wording

Gross Profit. Gross profit decreased 26% to $213.1 million for the three months ended September 30, 2024 from $289.5 million for the same period in 2023, representing gross margins of 31.0% and 33.9%, respectively. The decline in consolidated gross margin for the three months ended September 30, 2024, as compared to the same period in 2023, was primarily due to (1) lower margins in our nurse and allied solutions and physician and leadership solutions segments driven by compression in clinician pay packages, including housing, travel and allowances and (2) a lower margin in our technology and workforce solutions segment primarily due to a change in sales mix resulting from lower revenue in our higher-margin VMS business and higher revenue in our lower-margin language services business. The overall decline was partially offset by a change in sales mix resulting from lower revenue in our nurse and allied solutions segment. Gross margin by reportable segment for the three months ended September 30, 2024 and 2023 was 25.0% and 27.5% for nurse and allied solutions, 28.3% and 33.4% for physician and leadership solutions, and 57.9% and 65.0% for technology and workforce solutions, respectively.

Current wording

Gross Profit. Gross profit decreased 23% to $198.1 million for the three months ended March 31, 2025 from $257.5 million for the same period in 2024, representing gross margins of 28.7% and 31.4%, respectively. The decline in consolidated gross margin for the three months ended March 31, 2025, as compared to the same period in 2024, was primarily due to (1) lower margins in our nurse and allied solutions and physician and leadership solutions segments driven by increased provider pay packages, including housing, travel and allowances and (2) a lower margin in our technology and workforce solutions segment primarily due to a shift in sales mix resulting from reduced revenue in our higher-margin VMS business and increased revenue in our lower-margin language services business. The overall decline in consolidated gross margin was partially offset by a change in sales mix resulting from reduced revenue in our lower-margin nurse and allied solutions segment. Gross margin by reportable segment for the three months ended March 31, 2025 and 2024 was 22.7% and 25.1% for nurse and allied solutions, 27.3% and 31.6% for physician and leadership solutions, and 55.5% and 59.9% for technology and workforce solutions, respectively. Gross profit broken down among the reportable segments is as follows:

Previous wording

Selling, General and Administrative Expenses. Selling, general and administrative (“SG&A”) expenses consist predominantly of compensation and benefits costs for corporate employees, in addition to professional service fees, legal matter accruals and other overhead costs. SG&A expenses were $149.7 million, representing 21.8% of revenue, for the three months ended September 30, 2024, as compared to $163.4 million, representing 19.1% of revenue, for the same period in 2023. The decrease in SG&A expenses was primarily due to a $7.3 million decrease in professional services, legal and other expenses due to prudent expense management. The year-over-year increase in SG&A expenses in our physician and leadership solutions segment was driven by $5.8 million of additional SG&A expenses from the MSDR acquisition, partially offset by $4.6 million of lower segment expenses amid the decline in organic revenue. SG&A expenses broken down among the reportable segments, unallocated corporate overhead, and share-based compensation are as follows:

Current wording

Selling, General and Administrative Expenses. Selling, general and administrative (“SG&A”) expenses consist predominantly of compensation and benefits costs for corporate employees, in addition to professional service fees, legal matter accruals and other overhead costs. SG&A expenses were $147.7 million, representing 21.4% of revenue, for the three months ended March 31, 2025, as compared to $174.8 million, representing 21.3% of revenue, for the same period in 2024. The decrease in SG&A expenses was primarily due to a $20.4 million decrease in employee compensation and benefits (inclusive of share-based compensation) in response to the lower revenue, a $2.9 million decrease in the provision for expected credit losses, and a $2.5 million decrease in other expenses associated with our revenue decline. SG&A expenses broken down among the reportable segments, unallocated corporate overhead, and share-based compensation are as follows:

Previous wording

Depreciation and Amortization Expenses. Amortization expense decreased 2% to $22.1 million for the three months ended September 30, 2024 from $22.6 million for the same period in 2023, primarily attributable to having more intangible assets fully amortized during the three months ended September 30, 2024, partially offset by additional amortization expense related to the intangible assets acquired in the MSDR acquisition. Depreciation expense (exclusive of depreciation included in cost of revenue) increased 14% to $19.0 million for the three months ended September 30, 2024 from $16.6 million for the same period in 2023, primarily attributable to an increase in purchased and developed hardware and software placed in service for our ongoing technology investments to support our tech-centric total talent solutions initiatives and to optimize our internal front and back-office systems. Additionally, $1.9 million and $1.6 million of depreciation expense for our language services business is included in cost of revenue for the three months ended September 30, 2024 and 2023, respectively.

Current wording

Depreciation and Amortization Expenses. Amortization expense decreased 22% to $19.4 million for the three months ended March 31, 2025 from $24.9 million for the same period in 2024, primarily attributable to having more intangible assets fully amortized during the three months ended March 31, 2025. Depreciation expense (exclusive of depreciation included in cost of revenue) increased 3% to $18.5 million for the three months ended March 31, 2025 from $17.8 million for the same period in 2024, primarily attributable to an increase in purchased and developed hardware and software placed in service for our ongoing technology investments to support our tech-centric total talent solutions initiatives and to optimize our internal front and back-office systems. Additionally, $2.0 million and $1.8 million of depreciation expense for our language services business is included in cost of revenue for the three months ended March 31, 2025 and 2024, respectively.

Previous wording

Interest Expense, Net, and Other. Interest expense, net, and other was $14.4 million during the three months ended September 30, 2024 as compared to $11.5 million for the same period in 2023. The increase was primarily due to a higher average debt outstanding balance during the three months ended September 30, 2024.

Current wording

Interest Expense, Net, and Other. Interest expense, net, and other was $12.3 million during the three months ended March 31, 2025 as compared to $16.6 million for the same period in 2024. The decrease was primarily due to a lower average debt outstanding balance during the three months ended March 31, 2025.

Previous wording

Income Tax Expense. Income tax expense was $0.8 million for the three months ended September 30, 2024 as compared to $22.2 million for the same period in 2023, reflecting effective income tax rates of 10% and 29% for these periods, respectively. The decrease in the effective income tax rate was primarily attributable to the recognition of a net discrete tax benefit of $2.2 million during the three months ended September 30, 2024 compared to a $1.4 million net discrete tax expense during the same period in 2023, in relation to income before income taxes of $7.8 million and $75.4 million for the three months ended September 30, 2024 and 2023, respectively. We currently estimate our annual effective tax rate to be approximately 24% for 2024. The 10% effective tax rate for the three months ended September 30, 2024 differs from our estimated annual effective tax rate of 24% primarily due to certain discrete tax benefits recognized during the three months ended September 30, 2024, in relation to income before income taxes.

Current wording

Income Tax Expense. Income tax expense was $1.3 million for the three months ended March 31, 2025 as compared to $6.0 million for the same period in 2024, reflecting effective income tax rates of 697% and 26% for these periods, respectively. The increase in the effective income tax rate was primarily attributable to the recognition of $1.3 million of net discrete tax expense during the three months ended March 31, 2025 compared to $2.4 million of net discrete tax benefit during the same period in 2024, in relation to income before income taxes of $0.2 million and $23.3 million for the three months ended March 31, 2025 and 2024, respectively. We currently estimate our annual effective tax rate to be approximately (11)% for 2025. The 697% effective tax rate for the three months ended March 31, 2025 differs from our estimated annual effective tax rate of (11)% primarily due to certain discrete tax expenses recognized during the three months ended March 31, 2025, in relation to income before income taxes.

Previous wording

As of September 30, 2024, (1) $285.0 million was drawn with $444.6 million of available credit under our $750.0 million secured revolving credit facility (the “Senior Credit Facility”), (2) the aggregate principal amount of our 4.625% senior notes due 2027 (the “2027 Notes”) outstanding was $500.0 million, and (3) the aggregate principal amount of our 4.000% senior notes due 2029 (the “2029 Notes”) outstanding was $350.0 million. We describe in further detail our Amended Credit Agreement (as defined below), under which the Senior Credit Facility is governed, the 2027 Notes, and the 2029 Notes in Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (8), Notes Payable and Credit Agreement” of our 2023 Annual Report.

Current wording

As of March 31, 2025, (1) $150.0 million was drawn with $579.6 million of available credit under our $750.0 million secured revolving credit facility (the “Senior Credit Facility”), (2) the aggregate principal amount of our 4.625% senior notes due 2027 (the “2027 Notes”) outstanding was $500.0 million, and (3) the aggregate principal amount of our 4.000% senior notes due 2029 (the “2029 Notes”) outstanding was $350.0 million. We describe in further detail our Amended Credit Agreement (as defined below), under which the Senior Credit Facility is governed, the 2027 Notes, and the 2029 Notes in Part

Previous wording

As of September 30, 2024, the total of our contractual obligations under operating leases with initial terms in excess of one year was $52.7 million. We describe in further detail our operating lease arrangements in Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (5), Leases” of our 2023 Annual Report. We also have various obligations and working capital requirements, such as certain tax and legal matters, contingent consideration and other liabilities, that are recorded on our consolidated balance sheets. See additional information in the accompanying Note (7), “Fair Value Measurement,” Note (8), “Income Taxes,” Note (9), “Commitments and Contingencies,” and Note (10), “Balance Sheet Details.”

Current wording

As of March 31, 2025, the total of our contractual obligations under operating leases with initial terms in excess of one year was $48.6 million. We describe in further detail our operating lease arrangements in Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (5), Leases” of our 2024 Annual Report. We also have various obligations and working capital requirements, such as certain tax and legal matters, contingent consideration and other liabilities, that are recorded on our consolidated balance sheets. See additional information in the accompanying Note (6), “Fair Value Measurement,” Note (7), “Income Taxes,” Note (8), “Commitments and Contingencies,” and Note (9), “Balance Sheet Details.”

Previous wording

Net cash provided by operating activities for the nine months ended September 30, 2024 was $247.6 million, compared to $413.3 million for the same period in 2023. The decrease in net cash provided by operating activities was primarily attributable to (1) a decrease in net income excluding non-cash expenses of $186.9 million primarily due to a decline in segment operating income across our segments, (2) a decrease in other liabilities between periods of $62.8 million primarily due to prior year increases in income taxes payable (resulting from the timing of income tax payments) and accrued loss contingencies, (3) an increase in income taxes receivable between periods of $12.5 million primarily due to an overpayment of estimated taxes during the year ended December 31, 2022, and (4) a decrease in accounts payable and accrued expenses between periods of $9.0 million primarily due to payment of the legal settlement amount for the Clarke matter in the current year, partially offset by a larger decrease in the subcontractor payable balance in the prior year as compared to the current year primarily attributable to declines in associate vendor usage and timing of payments. The overall decrease in net cash provided by operating activities was partially offset by (1) an increase in accrued compensation and benefits between periods of $62.2 million primarily due to bonuses and commissions that were paid during the three months ended March 31, 2023 and (2) a decrease in accounts receivable and subcontractor receivables between periods of $41.8 million primarily due to a larger decrease in the receivables balance in the current year as compared to the prior year, which was primarily attributable to declines in revenue and associate vendor usage during the nine months ended September 30, 2024 along with timing of collections. Our Days Sales Outstanding (“DSO”) was 60 days at September 30, 2024, 70 days at December 31, 2023, and 61 days at September 30, 2023.

Current wording

Net cash provided by operating activities for the three months ended March 31, 2025 was $92.7 million, compared to $81.4 million for the same period in 2024. The increase in net cash provided by operating activities was primarily attributable to (1) an increase in accounts payable and accrued expenses between periods of $42.5 million primarily due to an increase in the subcontractor payable balance in the current year as compared to a decrease in the prior year primarily attributable to a decline in associate vendor usage and timing of payments, and (2) an increase in other liabilities between periods of $41.7 million primarily due to client deposits received for labor disruption services in the current year. The overall increase in net cash provided by operating activities was partially offset by (1) a decrease in net income excluding non-cash expenses of $16.1 million primarily due to a decline in segment operating income across our segments, (2) an increase in accounts receivable and subcontractor receivables between periods of $42.6 million primarily due to a larger decrease in the receivables balance in the prior year as compared to the current year, which was primarily attributable to larger decreases in revenue and associate vendor usage in the prior year, along with timing of collections, and (3) an increase in other current assets between periods of $11.0 million primarily due to subcontractor deposits related to labor disruption services in the current year. Our Days Sales Outstanding (“DSO”) was 55 days at March 31, 2025, 55 days at December 31, 2024, and 64 days at March 31, 2024.

Previous wording

Net cash used in investing activities for the nine months ended September 30, 2024 was $65.7 million, compared to net cash used in investing activities of $88.8 million for the same period in 2023. The decrease was primarily due to $8.4 million of payments to fund the deferred compensation plan during the nine months ended September 30, 2024, as compared to $24.9 million of payments during the nine months ended September 30, 2023. In addition, capital expenditures were $64.7 million and $73.8 million for the nine months ended September 30, 2024 and 2023, respectively.

Current wording

Net cash used in investing activities for the three months ended March 31, 2025 was $26.0 million, compared to net cash used in investing activities of $21.4 million for the same period in 2024. The increase was primarily due to (1) a net purchase of investments of $14.5 million during the three months ended March 31, 2025, as compared to net proceeds of $1.2 million during the three months ended March 31, 2024, and (2) $1.6 million of payments to fund the deferred compensation plan during the three months ended March 31, 2025, as compared to $4.5 million of payments during the three months ended March 31, 2024. In addition, capital expenditures were $10.0 million and $18.1 million for the three months ended March 31, 2025 and 2024, respectively.

Previous wording

Net cash used in financing activities during the nine months ended September 30, 2024 was $179.6 million, due to repayments of $260.0 million under the Senior Credit Facility and $4.6 million in cash paid for shares withheld for payroll taxes resulting from the vesting of employee equity awards, partially offset by borrowings of $85.0 million under the Senior Credit Facility. Net cash used in financing activities during the nine months ended September 30, 2023 was $352.8 million, due to (1) $424.7 million paid in connection with the repurchase of our common stock, (2) repayments of $330.0 million under the Senior Credit Facility, (3) $11.9 million in cash paid for shares withheld for payroll taxes resulting from the vesting of employee equity awards, (4) $7.5 million for acquisition contingent consideration earn-out payments and (5) $3.6 million payment of financing costs in connection with the Third Amendment (as defined below), all of which was partially offset by borrowings of $425.0 million under the Senior Credit Facility.

Current wording

Net cash used in financing activities during the three months ended March 31, 2025 was $61.2 million, due to repayments of $95.0 million under the Senior Credit Facility and $1.2 million in cash paid for shares withheld for payroll taxes resulting from the vesting of employee equity awards, partially offset by borrowings of $35.0 million under the Senior Credit Facility. Net cash used in financing activities during the three months ended March 31, 2024 was $39.0 million, due to repayments of $50.0 million under the Senior Credit Facility and $4.0 million in cash paid for shares withheld for payroll taxes resulting from the vesting of employee equity awards, partially offset by borrowings of $15.0 million under the Senior Credit Facility.

Previous wording

On February 10, 2023, we entered into the third amendment to our credit agreement (the “Third Amendment”). The Third Amendment (together with the credit agreement as amended to such date, collectively, the “Amended Credit Agreement”) provided for, among other things, an increase to the revolving commitments under the Senior Credit Facility to $750.0 million and an extension of the maturity date of the Amended Credit Agreement to February 10, 2028. As reported in our Current Report on Form 8-K filed on November 7, 2024, on November 5, 2024, we entered into the fourth amendment to our credit agreement (the “Fourth Amendment”) which increased our consolidated net leverage ratio covenant for the year ending December 31, 2025. Our obligations under the Amended Credit Agreement are secured by substantially all of our assets. We describe in further detail the terms of the Amended Credit Agreement in Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (8), Notes Payable and Credit Agreement” of our 2023 Annual Report.

Current wording

On November 5, 2024, we entered into the fourth amendment to our credit agreement (the “Fourth Amendment”). The Fourth Amendment (together with the credit agreement as amended to such date, collectively, the “Amended Credit Agreement”) increased our consolidated net leverage ratio covenant for the year ending December 31, 2025. Our obligations under the Amended Credit Agreement are secured by substantially all of our assets. We describe in further detail the terms of the Amended Credit Agreement in Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (8), Notes Payable and Credit Agreement” of our 2024 Annual Report.

Previous wording

At September 30, 2024, we maintained outstanding standby letters of credit totaling $20.9 million as collateral in relation to our workers’ compensation insurance agreements and a corporate office lease agreement. Of the $20.9 million of outstanding letters of credit, we have collateralized approximately $0.6 million in cash and cash equivalents and the remaining approximately $20.4 million is collateralized by the Senior Credit Facility. Outstanding standby letters of credit at December 31, 2023 totaled $21.3 million.

Current wording

At March 31, 2025, we maintained outstanding standby letters of credit totaling $21.0 million as collateral in relation to our workers’ compensation insurance agreements and a corporate office lease agreement. Of the $21.0 million of outstanding letters of credit, we have collateralized approximately $0.7 million in cash and cash equivalents and the remaining approximately $20.4 million is collateralized by the Senior Credit Facility. Outstanding standby letters of credit at December 31, 2024 totaled $20.9 million.

Previous wording

•the severity and duration of the impact the COVID-19 pandemic or any future pandemic or health crisis, the “Great Resignation,” economic downturns, inflation, recession or slow recoveries have on the financial condition and cash flow of many hospitals and healthcare systems such that it impairs their ability to make payments to us, timely or otherwise, for services rendered;

Current wording

•the severity and duration of any future pandemic or health crisis, economic downturns, inflation, recession or slow recoveries have on the financial condition and cash flow of many hospitals and healthcare systems such that it impairs their ability to make payments to us, timely or otherwise, for services rendered;

Previous wording

•the extent to which a resurgence in the COVID-19 pandemic may disrupt our operations due to the unavailability of our employees or healthcare professionals because of illness, risk of illness, quarantines, travel restrictions, mandatory vaccination requirements, desire to travel and work on temporary assignments or other factors that limit our existing or potential workforce and pool of candidates;

Current wording

•the extent to which a resurgence in the COVID-19 pandemic or any future pandemic or health crisis may disrupt our operations due to the unavailability of our employees or healthcare professionals because of illness, risk of illness, quarantines, travel restrictions, mandatory vaccination requirements, desire to travel and work on temporary assignments or other factors that limit our existing or potential workforce and pool of candidates;

Previous wording

•any recognition of an impairment to the substantial amount of goodwill or intangible assets on our balance sheet, which would adversely affect our results of operations;

Current wording

•any recognition of an impairment to the substantial amount of goodwill or intangible assets on our balance sheet, which could result in a material adverse impact to our results of operations;