AMN HEALTHCARE SERVICES INC [AMN] Filings

10-Q 1 amn-20240930.htm 10-Q amn-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________

FORM 10-Q

____________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


OR
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No.: 001-16753

AMN HEALTHCARE SERVICES, INC.

(Exact Name of Registrant as Specified in Its Charter)


Delaware		06-1500476
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

2999 Olympus Boulevard	Suite 500
Dallas	Texas	75019
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (866) 871-8519

____________________

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 par value	AMN	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange

Act). Yes ☐ No x

As of November 5, 2024, there were 38,073,722 shares of common stock, $0.01 par value, outstanding.

Auditor Name: KPMG LLP Auditor Location: San Diego, California Auditor Firm ID: 185

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Item		Page

	PART I - FINANCIAL INFORMATION

1.	Condensed Consolidated Financial Statements (unaudited):	1
	Condensed Consolidated Balance Sheets, As of September 30, 2024 and December 31, 2023	1
	Condensed Consolidated Statements of Comprehensive Income, For the Three and Nine Months Ended September 30, 2024 and 2023	2
	Condensed Consolidated Statements of Stockholders’ Equity, For the Nine Months Ended September 30, 2024 and 2023	3
	Condensed Consolidated Statements of Cash Flows, For the Nine Months Ended September 30, 2024 and 2023	4
	Notes to Unaudited Condensed Consolidated Financial Statements	6
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
3.	Quantitative and Qualitative Disclosures about Market Risk	27
4.	Controls and Procedures	27

	PART II - OTHER INFORMATION


1.	Legal Proceedings	28
1A.	Risk Factors	28
2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
3.	Defaults Upon Senior Securities	28
4.	Mine Safety Disclosures	28
5.	Other Information	28
6.	Exhibits	29
	Signatures	30

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PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

AMN HEALTHCARE SERVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited and in thousands, except par value)


	September 30, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	30,550	$	32,935
Accounts receivable, net of allowances of $31,199 and $32,233 at September 30, 2024 and December 31, 2023, respectively	451,062		623,488
Accounts receivable, subcontractor	68,566		117,703
Prepaid expenses	17,073		21,889
Other current assets	45,015		45,670
Total current assets	612,266		841,685
Restricted cash, cash equivalents and investments	72,167		68,845
Fixed assets, net of accumulated depreciation of $341,040 and $285,081 at September 30, 2024 and December 31, 2023, respectively	196,902		191,385

Other assets	267,266		236,796
Goodwill	1,116,815		1,111,549
Intangible assets, net of accumulated amortization of $513,785 and $442,052 at September 30, 2024 and December 31, 2023, respectively	402,400		474,134
Total assets	$	2,667,816	$	2,924,394
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	213,206	$	343,847
Accrued compensation and benefits	281,683		278,536




Other current liabilities	23,657		33,738
Total current liabilities	518,546		656,121
Revolving credit facility	285,000		460,000
Notes payable, net of unamortized fees and premium	845,576		844,688
Deferred income taxes, net	17,270		23,350

Other long-term liabilities	110,759		108,979
Total liabilities	1,777,151		2,093,138
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value; 10,000 shares authorized; none issued and outstanding at September 30, 2024 and December 31, 2023	—		—
Common stock, $0.01 par value; 200,000 shares authorized; 50,631 issued and 38,018 outstanding at September 30, 2024 and 50,423 issued and 37,810 outstanding at December 31, 2023	506		504
Additional paid-in capital	525,029		506,543
Treasury stock, at cost; 12,613 shares at September 30, 2024 and December 31, 2023	(1,127,043)		(1,127,043)
Retained earnings	1,492,229		1,451,675
Accumulated other comprehensive loss	(56)		(423)
Total stockholders’ equity	890,665		831,256
Total liabilities and stockholders’ equity	$	2,667,816	$	2,924,394

See accompanying notes to unaudited condensed consolidated financial statements.

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AMN HEALTHCARE SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited and in thousands, except per share amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenue	$	687,509	$	853,463	$	2,249,072	$	2,970,985
Cost of revenue	474,454		563,957		1,548,684		1,982,352
Gross profit	213,055		289,506		700,388		988,633
Operating expenses:
Selling, general and administrative	149,681		163,405		473,567		570,775
Depreciation and amortization (exclusive of depreciation included in cost of revenue)	41,122		39,175		126,942		113,599
Total operating expenses	190,803		202,580		600,509		684,374
Income from operations	22,252		86,926		99,879		304,259
Interest expense, net, and other	14,444		11,541		46,787		33,975
Income before income taxes	7,808		75,385		53,092		270,284
Income tax expense	819		22,211		12,538		72,094
Net income	$	6,989	$	53,174	$	40,554	$	198,190

Other comprehensive income:
Unrealized gains on available-for-sale securities, net, and other	101		133		367		329
Other comprehensive income	101		133		367		329

Comprehensive income	$	7,090	$	53,307	$	40,921	$	198,519

Net income per common share:
Basic	$	0.18	$	1.39	$	1.06	$	5.01
Diluted	$	0.18	$	1.39	$	1.06	$	4.99
Weighted average common shares outstanding:
Basic	38,200		38,147		38,163		39,547
Diluted	38,287		38,325		38,247		39,734

See accompanying notes to unaudited condensed consolidated financial statements.

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AMN HEALTHCARE SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited and in thousands)


	Common Stock			Additional Paid-in Capital		Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Loss		Total
	Shares	Amount				Shares	Amount
Balance, December 31, 2022	50,109	$	501	$	501,674	(8,230)	$	(698,598)	$	1,240,996	$	(939)	$	1,043,634
Repurchase of common stock	—	—		—		(1,768)	(176,300)		—		—		(176,300)
Equity awards vested, net of shares withheld for taxes	127	1		(6,135)		—	—		—		—		(6,134)

Share-based compensation	—	—		10,318		—	—		—		—		10,318
Comprehensive income	—	—		—		—	—		84,110		146		84,256
Balance, March 31, 2023	50,236	$	502	$	505,857	(9,998)	$	(874,898)	$	1,325,106	$	(793)	$	955,774
Repurchase of common stock	—	—		(40,000)		(2,354)	(211,964)		—		—		(251,964)
Equity awards vested, net of shares withheld for taxes	103	1		(3,288)		—	—		—		—		(3,287)
Share-based compensation	—	—		4,818		—	—		—		—		4,818
Comprehensive income	—	—		—		—	—		60,906		50		60,956
Balance, June 30, 2023	50,339	$	503	$	467,387	(12,352)	$	(1,086,862)	$	1,386,012	$	(743)	$	766,297
Repurchase of common stock	—	—		40,000		(261)	(40,219)		—		—		(219)
Equity awards vested, net of shares withheld for taxes	48	1		(2,523)		—	—		—		—		(2,522)
Share-based compensation	—	—		306		—	—		—		—		306
Comprehensive income	—	—		—		—	—		53,174		133		53,307
Balance, September 30, 2023	50,387	$	504	$	505,170	(12,613)	$	(1,127,081)	$	1,439,186	$	(610)	$	817,169


	Common Stock			Additional Paid-in Capital		Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Loss		Total
	Shares	Amount				Shares	Amount
Balance, December 31, 2023	50,423	$	504	$	506,543	(12,613)	$	(1,127,043)	$	1,451,675	$	(423)	$	831,256

Equity awards vested, net of shares withheld for taxes	114	1		(3,974)		—	—		—		—		(3,973)
Shares purchased under employee stock purchase plan	—	—		1,757		—	—		—		—		1,757

Share-based compensation	—	—		7,739		—	—		—		—		7,739
Comprehensive income	—	—		—		—	—		17,328		84		17,412
Balance, March 31, 2024	50,537	$	505	$	512,065	(12,613)	$	(1,127,043)	$	1,469,003	$	(339)	$	854,191

Equity awards vested, net of shares withheld for taxes	43	1		(109)		—	—		—		—		(108)
Shares issued under employee stock purchase plan	33	—		—		—	—		—		—		—
Share-based compensation	—	—		6,357		—	—		—		—		6,357
Comprehensive income	—	—		—		—	—		16,237		182		16,419
Balance, June 30, 2024	50,613	$	506	$	518,313	(12,613)	$	(1,127,043)	$	1,485,240	$	(157)	$	876,859

Equity awards vested, net of shares withheld for taxes	18	—		(469)		—	—		—		—		(469)
Shares purchased under employee stock purchase plan	—	—		1,630		—	—		—		—		1,630
Share-based compensation	—	—		5,555		—	—		—		—		5,555
Comprehensive income	—	—		—		—	—		6,989		101		7,090
Balance, September 30, 2024	50,631	$	506	$	525,029	(12,613)	$	(1,127,043)	$	1,492,229	$	(56)	$	890,665

See accompanying notes to unaudited condensed consolidated financial statements.

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AMN HEALTHCARE SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and in thousands)


	Nine Months Ended September 30,
	2024		2023
Cash flows from operating activities:
Net income	$	40,554	$	198,190
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (inclusive of depreciation included in cost of revenue)	132,305		117,795
Non-cash interest expense and other	1,601		1,587

Change in fair value of contingent consideration liabilities	—		2,430
Increase in allowance for credit losses and sales credits	5,556		31,968
Provision for deferred income taxes	(5,908)		8,495
Share-based compensation	19,651		15,442
Loss on disposal or impairment of long-lived assets	42		1,793

Net loss on investments in available-for-sale securities	197		228
Net gain on deferred compensation balances	(1,189)		(300)
Non-cash lease expense	(903)		1,146
Changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable	162,958		77,572
Accounts receivable, subcontractor	49,137		92,750
Income taxes receivable	(3,603)		8,875
Prepaid expenses	3,462		344
Other current assets	163		3,793
Other assets	365		(1,103)

Accounts payable and accrued expenses	(131,796)		(122,763)
Accrued compensation and benefits	(16,082)		(78,290)
Other liabilities	(10,301)		52,503

Deferred revenue	1,395		840

Net cash provided by operating activities	247,604		413,295

Cash flows from investing activities:
Purchase and development of fixed assets	(64,671)		(73,831)

Proceeds from sale and maturity of investments	5,699		9,894

Proceeds from sale of equity investment	—		77
Payments to fund deferred compensation plan	(8,412)		(24,902)



Cash received for working capital settlement of prior year acquisition	1,649		—
Net cash used in investing activities	(65,735)		(88,762)

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	Nine Months Ended September 30,
	2024		2023
Cash flows from financing activities:



Payments on revolving credit facility	(260,000)		(330,000)
Proceeds from revolving credit facility	85,000		425,000


Repurchase of common stock (1)	—		(424,744)
Payment of financing costs	—		(3,579)
Earn-out payments to settle contingent consideration liabilities for prior acquisitions	—		(7,500)
Cash paid for shares withheld for taxes	(4,550)		(11,943)
Net cash used in financing activities	(179,550)		(352,766)

Net increase (decrease) in cash, cash equivalents and restricted cash	2,319		(28,233)
Cash, cash equivalents and restricted cash at beginning of period	108,273		137,872
Cash, cash equivalents and restricted cash at end of period	$	110,592	$	109,639

Supplemental disclosures of cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	7,844	$	6,891
Cash paid for interest (net of $509 and $1,026 capitalized for the nine months ended September 30, 2024 and 2023, respectively)	$	38,125	$	25,087
Cash paid for income taxes	$	21,675	$	10,833









Supplemental disclosures of non-cash investing and financing activities:
Purchase of fixed assets recorded in accounts payable and accrued expenses	$	9,589	$	14,841
Excise tax payable on share repurchases	$	—	$	3,739
Right-of-use assets obtained in exchange for operating lease liabilities	$	4,969	$	25,794

(1) The difference between the amount reported for the nine months ended September 30, 2023 and the corresponding amounts presented in the condensed consolidated statements of stockholders’ equity is due to accrued excise tax payable on share repurchases recorded within treasury stock.

See accompanying notes to unaudited condensed consolidated financial statements.

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AMN HEALTHCARE SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

1. BASIS OF PRESENTATION

The condensed consolidated balance sheets and related condensed consolidated statements of comprehensive income, stockholders’ equity and cash flows contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”), which are unaudited, include the accounts of AMN Healthcare Services, Inc. and its wholly-owned subsidiaries (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all entries necessary for a fair presentation of such unaudited condensed consolidated financial statements have been included. These entries consisted of all normal recurring items. The results of operations for the interim period are not necessarily indicative of the results to be expected for any other interim period or for the entire fiscal year or for any future period.

The unaudited condensed consolidated financial statements do not include all information and notes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). Please refer to the Company’s audited consolidated financial statements and the related notes for the fiscal year ended December 31, 2023, contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission on February 22, 2024 (the “2023 Annual Report”).

The preparation of financial statements in conformity with U.S. GAAP requires management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, the Company evaluates its estimates, including those related to goodwill and intangible assets purchased in a business combination, asset impairments, accruals for self-insurance, contingent liabilities such as legal accruals, and income taxes. The Company bases these estimates on the information that is currently available and on various other assumptions that it believes are reasonable under the circumstances. Actual results could differ from those estimates under different assumptions or conditions.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments and restricted investments with an original maturity of three months or less to be cash equivalents and restricted cash equivalents, respectively. Cash and cash equivalents include currency on hand, deposits with financial institutions, money market funds and other highly liquid investments. Restricted cash and cash equivalents primarily include cash, corporate bonds and commercial paper that serve as collateral for the Company’s captive insurance subsidiary claim payments. See Note (7), “Fair Value Measurement” for additional information.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying condensed consolidated balance sheets and related notes to the amounts presented in the accompanying condensed consolidated statements of cash flows.


	September 30, 2024		December 31, 2023
Cash and cash equivalents	$	30,550	$	32,935
Restricted cash and cash equivalents (included in other current assets)	18,004		22,056
Restricted cash, cash equivalents and investments	72,167		68,845
Total cash, cash equivalents and restricted cash and investments	120,721		123,836
Less restricted investments	(10,129)		(15,563)
Total cash, cash equivalents and restricted cash	$	110,592	$	108,273

The Company maintains its cash and restricted cash in bank deposit accounts primarily at large, national financial institutions, which typically exceed federally insured limits. The Company has not experienced any losses in such accounts.

Accounts Receivable

The Company records accounts receivable at the invoiced amount. Accounts receivable are non-interest bearing. The Company maintains an allowance for expected credit losses based on the Company’s historical write-off experience, an

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assessment of its customers’ financial conditions and available information that is relevant to assessing the collectability of cash flows, which includes current conditions and forecasts about future economic conditions.

The following table provides a reconciliation of activity in the allowance for credit losses for accounts receivable:


	2024		2023
Balance as of January 1,	$	32,233	$	31,910

Provision for expected credit losses	5,664		5,464
Amounts written off charged against the allowance	(6,698)		(2,948)

Balance as of September 30,	$	31,199	$	34,426

2. ACQUISITIONS

The Company accounted for the acquisition set forth below using the acquisition method of accounting. Accordingly, the Company recorded the tangible and intangible assets acquired and liabilities assumed at their estimated fair values as of the date of acquisition. Since the date of acquisition, the Company has revised the allocation of the purchase price to the tangible and intangible assets acquired and liabilities assumed based on the analysis of the information that has been made available through September 30, 2024. The goodwill recognized for the acquisition is attributable to expected growth as the Company leverages its brand and diversifies its services offered to clients, including potential revenue growth and margin expansion. The Company did not incur any material acquisition-related costs.

MSDR Acquisition

On November 30, 2023, the Company completed its acquisition of MSI Systems Corp. and DrWanted.com LLC (together, “MSDR”), two healthcare staffing companies that specialize in locum tenens and advanced practice. The initial purchase price of $292,818 consisted entirely of cash consideration paid upon acquisition. The acquisition was funded through borrowings under the Company’s $750,000 secured revolving credit facility (the “Senior Credit Facility”). The results of MSDR have been included in the Company’s physician and leadership solutions segment since the date of acquisition. During the second quarter of 2024, $1,649 was returned to the Company in respect of the final working capital settlement.

The preliminary allocation of the $291,169 purchase price, which was reduced by the final working capital settlement during the second quarter of 2024, consisted of (1) $43,323 of fair value of tangible assets acquired, which included $643 cash received, (2) $25,190 of liabilities assumed, (3) $92,000 of identified intangible assets, and (4) $181,036 of goodwill, of which $92,208 is deductible for tax purposes. The provisional items include the final working capital settlement and the assessment of additional information to finalize the measurement of certain assets acquired and liabilities assumed, which primarily consist of income tax matters and operating leases. The intangible assets acquired have a weighted average useful life of approximately seven years. The following table summarizes the fair value and useful life of each intangible asset acquired as of the acquisition date:


		Fair Value		Useful Life
				(in years)
Identifiable intangible assets
	Customer relationships	$	54,300	7 - 10
	Tradenames and trademarks	26,400		3
	Staffing databases	11,300		5
		$	92,000

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3. REVENUE RECOGNITION

Revenue primarily consists of fees earned from the temporary staffing and permanent placement of healthcare professionals, executives, and leaders (clinical and operational). The Company also generates revenue from technology-enabled services, including language interpretation and vendor management systems, and talent planning and acquisition services, including recruitment process outsourcing. The Company recognizes revenue when control of its services is transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those services.

Revenue from temporary staffing services is recognized as the services are rendered by clinical and non-clinical healthcare professionals. Under the Company’s managed services program (“MSP”) arrangements, the Company manages all or a part of a customer’s supplemental workforce needs utilizing its own network of healthcare professionals along with those of third-party subcontractors. Revenue and the related direct costs are recorded in accordance with the accounting guidance on reporting revenue gross as a principal versus net as an agent. Revenue is recorded on a gross basis when the Company utilizes its own network of healthcare professionals (including nurses, allied healthcare professionals, locum tenens, and executive and leadership interim staff). Conversely, when the Company uses subcontractors under an MSP arrangement and acts as an agent, revenue is recorded net of the related subcontractor’s expense. Revenue from permanent placement and recruitment process outsourcing services is recognized as the services are rendered. Depending on the arrangement, the Company’s technology-enabled service revenue is recognized either as the services are rendered or ratably over the applicable arrangement’s service period. Revenue for the language services business is recorded on a gross basis. Under vendor management systems arrangements, revenue is recorded on a net basis as an agent because other companies are primarily responsible for providing the staffing services, for which the Company is entitled a percentage fee.

The Company’s customers are primarily billed as services are rendered. Any fees billed in advance of being earned are recorded as deferred revenue. While payment terms vary by the type of customer and the services rendered, the term between invoicing and when payment is due is not significant.

The Company has elected to apply the following practical expedients and optional exemptions related to contract costs and revenue recognition:

•Recognize incremental costs of obtaining a contract with amortization periods of one year or less as expense when incurred. These costs are recorded within selling, general and administrative expenses.

•Recognize revenue in the amount of consideration that the Company has a right to invoice the customer if that amount corresponds directly with the value to the customer of the Company’s services completed to date.

•Exemptions from disclosing the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts for which revenue is recognized in the amount of consideration that the Company has a right to invoice for services performed and (iii) contracts for which variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation.

See Note (5), “Segment Information,” for additional information regarding the Company’s revenue disaggregated by service type.

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4. NET INCOME PER COMMON SHARE

Basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period. The following table sets forth the computation of basic and diluted net income per common share:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net income	$	6,989	$	53,174	$	40,554	$	198,190

Net income per common share - basic	$	0.18	$	1.39	$	1.06	$	5.01
Net income per common share - diluted	$	0.18	$	1.39	$	1.06	$	4.99

Weighted average common shares outstanding - basic	38,200		38,147		38,163		39,547
Plus dilutive effect of potential common shares	87		178		84		187
Weighted average common shares outstanding - diluted	38,287		38,325		38,247		39,734

Anti-dilutive potential common shares excluded from diluted weighted average common shares outstanding	411		43		392		84

The dilutive effect of potential shares primarily includes outstanding share-based awards, which consists of restricted stock units, performance restricted stock units, and obligations under the Company’s employee stock purchase plan (the “ESPP”).

In the second quarter of 2023, the Company entered into an accelerated share repurchase (“ASR”) agreement with a counterparty whereupon the Company prepaid $200,000 and received an initial delivery of 1,760 shares of its common stock. In the third quarter of 2023, the Company received a final delivery of approximately 261 additional shares of its common stock, representing the final settlement of the ASR agreement. During the three months ended June 30, 2023, the prepayment was recognized as a reduction to stockholders’ equity, consisting of (1) an increase in treasury stock, which reflected the fair value of the shares received upon initial delivery, and (2) a reduction in additional paid-in capital, which reflected the pending settlement of the ASR agreement. The reduction in additional paid-in capital was reclassified to treasury stock during the three months ended September 30, 2023 upon final settlement. Additional information regarding the Company’s share repurchase program and the shares repurchased thereunder (including the ASR) is disclosed in Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (b), Capital Stock—Treasury Stock” of the 2023 Annual Report.

5. SEGMENT INFORMATION

The Company’s operating segments are identified in the same manner as they are reported internally and used by the Company’s chief operating decision maker for the purpose of evaluating performance and allocating resources. The Company has three reportable segments: (1) nurse and allied solutions, (2) physician and leadership solutions, and (3) technology and workforce solutions. The nurse and allied solutions segment includes the Company’s travel nurse staffing (including international nurse staffing and rapid response nurse staffing), labor disruption staffing, local staffing, international nurse permanent placement, and allied staffing (including revenue cycle solutions) businesses. The physician and leadership solutions segment includes the Company’s locum tenens staffing, healthcare interim leadership staffing, executive search, and physician permanent placement businesses. The technology and workforce solutions segment includes the Company’s language services, vendor management systems, workforce optimization, and outsourced solutions businesses.

The Company’s chief operating decision maker relies on internal management reporting processes that provide revenue and operating income by reportable segment for making financial decisions and allocating resources. Segment operating income represents income before income taxes plus depreciation, amortization of intangible assets, share-based compensation, interest expense, net, and other, and unallocated corporate overhead. The Company’s management does not evaluate, manage or measure performance of segments using asset information; accordingly, asset information by segment is not prepared or disclosed.

The following table provides a reconciliation of revenue and operating income by reportable segment to consolidated results and was derived from each segment’s internal financial information as used for corporate management purposes:

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	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenue
Nurse and allied solutions	$	399,368	$	573,426	$	1,361,064	$	2,086,921
Physician and leadership solutions	180,605		159,554		555,467		501,540
Technology and workforce solutions	107,536		120,483		332,541		382,524
	$	687,509	$	853,463	$	2,249,072	$	2,970,985
Segment operating income
Nurse and allied solutions	$	35,110	$	82,882	$	134,659	$	299,320
Physician and leadership solutions	18,134		21,609		62,017		73,165
Technology and workforce solutions	41,948		50,664		133,477		173,297
	95,192		155,155		330,153		545,782
Unallocated corporate overhead	24,335		27,196		78,318		108,286
Depreciation and amortization	41,122		39,175		126,942		113,599
Depreciation (included in cost of revenue)	1,928		1,552		5,363		4,196
Share-based compensation	5,555		306		19,651		15,442
Interest expense, net, and other	14,444		11,541		46,787		33,975
Income before income taxes	$	7,808	$	75,385	$	53,092	$	270,284

The following table summarizes the activity related to the carrying value of goodwill by reportable segment:


	Nurse and Allied Solutions		Physician and Leadership Solutions		Technology and Workforce Solutions		Total
Balance, January 1, 2024	$	382,420	$	328,570	$	400,559	$	1,111,549


Goodwill adjustment for MSDR acquisition	—		5,266		—		5,266

Balance, September 30, 2024	$	382,420	$	333,836	$	400,559	$	1,116,815
Accumulated impairment loss as of December 31, 2023 and September 30, 2024	$	154,444	$	60,495	$	—	$	214,939

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Disaggregation of Revenue

The following tables present the Company’s revenue disaggregated by service type:


	Three Months Ended September 30, 2024
	Nurse and Allied Solutions		Physician and Leadership Solutions		Technology and Workforce Solutions		Total
Travel nurse staffing	$	243,745	$	—	$	—	$	243,745
Labor disruption services	486		—		—		486
Local staffing	10,494		—		—		10,494
Allied staffing	140,872		—		—		140,872
Locum tenens staffing	—		141,716		—		141,716
Interim leadership staffing	—		28,862		—		28,862
Temporary staffing	395,597		170,578		—		566,175
Permanent placement (1)	3,771		10,027		—		13,798
Language services	—		—		75,009		75,009
Vendor management systems	—		—		25,018		25,018
Other technologies	—		—		5,044		5,044
Technology-enabled services	—		—		105,071		105,071
Talent planning and acquisition	—		—		2,465		2,465
Total revenue	$	399,368	$	180,605	$	107,536	$	687,509


	Three Months Ended September 30, 2023
	Nurse and Allied Solutions		Physician and Leadership Solutions		Technology and Workforce Solutions		Total
Travel nurse staffing	$	384,102	$	—	$	—	$	384,102
Labor disruption services	777		—		—		777
Local staffing	16,991		—		—		16,991
Allied staffing	167,622		—		—		167,622
Locum tenens staffing	—		112,514		—		112,514
Interim leadership staffing	—		30,910		—		30,910
Temporary staffing	569,492		143,424		—		712,916
Permanent placement (1)	3,934		16,130		—		20,064
Language services	—		—		66,406		66,406
Vendor management systems	—		—		38,116		38,116
Other technologies	—		—		5,052		5,052
Technology-enabled services	—		—		109,574		109,574
Talent planning and acquisition	—		—		10,909		10,909
Total revenue	$	573,426	$	159,554	$	120,483	$	853,463

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	Nine Months Ended September 30, 2024
	Nurse and Allied Solutions		Physician and Leadership Solutions		Technology and Workforce Solutions		Total
Travel nurse staffing	$	854,746	$	—	$	—	$	854,746
Labor disruption services	886		—		—		886
Local staffing	33,786		—		—		33,786
Allied staffing	462,001		—		—		462,001
Locum tenens staffing	—		429,700		—		429,700
Interim leadership staffing	—		89,373		—		89,373
Temporary staffing	1,351,419		519,073		—		1,870,492
Permanent placement (1)	9,645		36,394		—		46,039
Language services	—		—		221,749		221,749
Vendor management systems	—		—		81,671		81,671
Other technologies	—		—		15,993		15,993
Technology-enabled services	—		—		319,413		319,413
Talent planning and acquisition	—		—		13,128		13,128
Total revenue	$	1,361,064	$	555,467	$	332,541	$	2,249,072


	Nine Months Ended September 30, 2023
	Nurse and Allied Solutions		Physician and Leadership Solutions		Technology and Workforce Solutions		Total
Travel nurse staffing	$	1,453,988	$	—	$	—	$	1,453,988
Labor disruption services	11,515		—		—		11,515
Local staffing	61,038		—		—		61,038
Allied staffing	545,959		—		—		545,959
Locum tenens staffing	—		341,129		—		341,129
Interim leadership staffing	—		107,553		—		107,553
Temporary staffing	2,072,500		448,682		—		2,521,182
Permanent placement (1)	14,421		52,858		—		67,279
Language services	—		—		191,732		191,732
Vendor management systems	—		—		138,843		138,843
Other technologies	—		—		18,191		18,191
Technology-enabled services	—		—		348,766		348,766
Talent planning and acquisition	—		—		33,758		33,758
Total revenue	$	2,086,921	$	501,540	$	382,524	$	2,970,985

(1) Includes revenue from international nurse permanent placement, physician permanent placement and executive search.

The following table presents the Company’s international nurse revenue by service type:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
International nurse staffing (1)	$	41,376	$	53,990	$	129,668	$	155,454
International nurse permanent placement (2)	3,771		3,934		9,645		14,421
Total international nurse revenue	$	45,147	$	57,924	$	139,313	$	169,875

(1) Included in “Travel nurse staffing” as presented in the preceding tables.

(2) Included in “Permanent placement” as presented in the preceding tables.

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6. NOTES PAYABLE AND CREDIT AGREEMENT

On February 10, 2023, the Company entered into the third amendment to its credit agreement (the “Third Amendment”). The Third Amendment provides for, among other things, the following: (i) an extension of the maturity date of the Senior Credit Facility to February 10, 2028, (ii) an increase of the Senior Credit Facility from $400,000 to $750,000, and (iii) a transition from LIBOR to a Secured Overnight Financing Rate (“SOFR”)-based interest rate. As reported in the Company’s Current Report on Form 8-K filed on November 7, 2024, on November 5, 2024, the Company entered into the fourth amendment to its credit agreement which increased the consolidated net leverage ratio covenant for the year ending December 31, 2025. Additional information regarding the Senior Credit Facility and the amended credit agreement is disclosed in Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (8), Notes Payable and Credit Agreement” of the 2023 Annual Report.

7. FAIR VALUE MEASUREMENT

The Company’s valuation techniques and inputs used to measure fair value and the definition of the three levels (Level 1, Level 2, and Level 3) of the fair value hierarchy are disclosed in Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (3), Fair Value Measurement” of the 2023 Annual Report. The Company has not changed the valuation techniques or inputs it uses for its fair value measurement during the nine months ended September 30, 2024.

Assets and Liabilities Measured on a Recurring Basis

From time to time, the Company invests a portion of its cash and cash equivalents in non-federally insured money market funds that are measured at fair value based on quoted prices, which are Level 1 inputs.

The Company has a deferred compensation plan for certain executives and employees, which is composed of deferred compensation and all related income and losses attributable thereto. The Company’s obligation under its deferred compensation plan is measured at fair value based on quoted market prices of the participants’ elected investments, which are Level 1 inputs.

The Company’s restricted cash equivalents and investments that serve as collateral for the Company’s captive insurance company include commercial paper and corporate bonds. The commercial paper is measured at observable market prices for identical securities that are traded in less active markets, which are Level 2 inputs. The corporate bonds are measured using readily available pricing sources that utilize observable market data, including the current interest rate for comparable instruments, which are Level 2 inputs. The following table presents the fair value of commercial paper and corporate bonds issued and outstanding:


	As of September 30, 2024		As of December 31, 2023
Commercial paper	$	55,101	$	48,206
Corporate bonds	—		—
Total classified as restricted cash equivalents	$	55,101	$	48,206
Commercial paper	$	—	$	—
Corporate bonds	10,129		15,563
Total classified as restricted investments	$	10,129	$	15,563

The Company’s contingent consideration liabilities associated with acquisitions are measured at fair value using a probability-weighted discounted cash flow analysis or a simulation-based methodology for the acquired companies, which are Level 3 inputs. The Company recognizes changes to the fair value of its contingent consideration liabilities in selling, general and administrative expenses in the condensed consolidated statements of comprehensive income. There were no contingent consideration liabilities outstanding as of both September 30, 2024 and December 31, 2023.

The following table presents information about the above-referenced assets and liabilities and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value:

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	Fair Value Measurements as of September 30, 2024								Fair Value Measurements as of December 31, 2023
Assets (Liabilities)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total

Deferred compensation	$	(188,738)	$	—	$	—	$	(188,738)	$	(165,574)	$	—	$	—	$	(165,574)
Corporate bonds	—		10,129		—		10,129		—		15,563		—		15,563
Commercial paper	—		55,101		—		55,101		—		48,206		—		48,206

Assets Measured on a Non-Recurring Basis

The Company applies fair value techniques on a non-recurring basis associated with identifiable intangible assets acquired through acquisitions and valuing potential impairment losses related to its goodwill, indefinite-lived intangible assets, long-lived assets, and equity investments.

The fair value of identifiable intangible assets is determined using either the income approach (the relief-from-royalty method, multi-period excess earnings method or with-and-without method) or the cost approach (replacement cost method). These valuation approaches use a combination of assumptions, including Level 3 inputs, such as (i) forecasted revenue, growth rates and customer attrition rates, (ii) forecasted operating expenses and profit margins, and (iii) royalty rates and discount rates used to present value the forecasted cash flows.

The Company evaluates goodwill and indefinite-lived intangible assets annually for impairment and whenever events or changes in circumstances indicate that it is more likely than not that an impairment exists. The Company determines the fair value of its reporting units based on a combination of inputs, including the market capitalization of the Company, as well as Level 3 inputs such as discounted cash flows, which are not observable from the market, directly or indirectly. The Company determines the fair value of its indefinite-lived intangible assets using the income approach (relief-from-royalty method) based on Level 3 inputs.

The Company’s equity investment represents an investment in a non-controlled corporation without a readily determinable market value. The Company has elected to measure the investment at cost minus impairment, if any, plus or minus changes resulting from observable price changes. The fair value is determined by using quoted prices for identical or similar investments of the same issuer, which are Level 2 inputs, and other information available to the Company such as the rights and obligations of the securities. The Company recognizes changes to the fair value of its equity investment in interest expense, net, and other in the condensed consolidated statements of comprehensive income. As of September 30, 2024, the Company has recognized cumulative upward adjustments and cumulative downward adjustments (including impairments) of $14,033 and $10,130, respectively. The balance of the equity investment was $12,503 as of both September 30, 2024 and December 31, 2023.

There were no material impairment charges recorded during the nine months ended September 30, 2024 and 2023.

Fair Value of Financial Instruments

The Company is required to disclose the fair value of financial instruments for which it is practicable to estimate the value, even though these instruments are not recognized at fair value in the consolidated balance sheets. The fair value of the Company’s 4.625% senior notes due 2027 (the “2027 Notes”) and 4.000% senior notes due 2029 (the “2029 Notes”) was estimated using quoted market prices in active markets for identical liabilities, which are Level 1 inputs. The carrying amounts and estimated fair value of the 2027 Notes and the 2029 Notes are presented in the following table. See additional information regarding 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 the 2023 Annual Report.


	As of September 30, 2024				As of December 31, 2023
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
2027 Notes	$	500,000	$	486,875	$	500,000	$	468,750
2029 Notes	350,000		326,375		350,000		314,125

The fair value of the Company’s long-term self-insurance accruals cannot be estimated as the Company cannot reasonably determine the timing of future payments.

8. INCOME TAXES

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The Company is subject to taxation in the U.S. and various states and foreign jurisdictions. With few exceptions, as of September 30, 2024, the Company is no longer subject to state, local or foreign examinations by tax authorities for tax years before 2011, and the Company is no longer subject to U.S. federal income or payroll tax examinations for tax years before 2020.

The Company believes its liability for unrecognized tax benefits and contingent tax issues is adequate with respect to all open years. Notwithstanding the foregoing, the Company could adjust its provision for income taxes and contingent tax liability based on future developments.

9. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

From time to time, the Company is involved in various lawsuits, claims, investigations, and proceedings that arise in the ordinary course of business. These matters typically relate to professional liability, tax, compensation, contract, competitor disputes and employee-related matters and include individual, representative and class action lawsuits, as well as inquiries and investigations by governmental agencies regarding the Company’s employment and compensation practices. Additionally, some of the Company’s clients may also become subject to claims, governmental inquiries and investigations, and legal actions relating to services provided by the Company’s healthcare professionals. Depending upon the particular facts and circumstances, the Company may also be subject to indemnification obligations under its contracts with such clients relating to these matters. The Company accrues for contingencies and records a liability when management believes an adverse outcome from a loss contingency is both probable and the amount, or a range, can be reasonably estimated. Significant judgment is required to determine both probability of loss and the estimated amount. The Company reviews its loss contingencies at least quarterly and adjusts its accruals and/or disclosures to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, or other new information, as deemed necessary. The most significant matters for which the Company has established loss contingencies are class and representative actions related to wage and hour claims under California and Federal law. Specifically, among other claims in these lawsuits, it is alleged that certain expense reimbursements should be considered wages and included in the regular rate of pay for purposes of calculating overtime rates.

On May 26, 2016, former travel nurse Verna Maxwell Clarke filed a complaint against AMN Services, LLC, in California Superior Court in Los Angeles County. The Company removed the case to the United States District Court for the Central District of California (Case No. 2:16-cv-04132-DSF-KS) (the “Clarke Matter”). The complaint asserts that, due to the Company’s per diem adjustment practices, traveling nurses’ per diem benefits should be included in their regular rate of pay for the purposes of calculating their overtime compensation. The Company reached an agreement to settle this matter in its entirety and accordingly recorded an accrual amounting to $62,000. Final approval of the settlement was granted in the second quarter of 2024, and the Company disbursed the settlement amount in the third quarter of 2024.

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10. BALANCE SHEET DETAILS

The consolidated balance sheets detail is as follows:


	September 30, 2024		December 31, 2023
Other current assets:
Restricted cash and cash equivalents	$	18,004	$