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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, 2021
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-20210930_g1.jpg
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.)
8840 Cypress Waters BoulevardSuite 300
DallasTexas75019
(Address of Principal Executive Offices)(Zip Code)

Registrant’s Telephone Number, Including Area Code: (866871-8519
____________________

Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of each exchange on which registered
Common Stock, $0.01 par valueAMNNew 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 filerAccelerated filer   Non-accelerated filer
Smaller reporting companyEmerging 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 3, 2021, there were 47,275,009 shares of common stock, $0.01 par value, outstanding.



TABLE OF CONTENTS
 
Item Page
PART I - FINANCIAL INFORMATION
1.
2.
3.
4.
PART II - OTHER INFORMATION
1.
1A.
2.
3.
4.
5.
6.




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, 2021December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents$137,041 $29,213 
Accounts receivable, net of allowances of $6,148 and $7,043 at September 30, 2021 and December 31, 2020, respectively
570,101 376,099 
Accounts receivable, subcontractor141,626 73,985 
Prepaid expenses19,367 13,629 
Other current assets31,396 40,809 
Total current assets899,531 533,735 
Restricted cash, cash equivalents and investments63,603 61,347 
Fixed assets, net of accumulated depreciation of $190,578 and $161,752 at September 30, 2021 and December 31, 2020, respectively
127,762 116,174 
Operating lease right-of-use assets36,487 77,735 
Other assets157,909 135,120 
Goodwill893,283 864,485 
Intangible assets, net of accumulated amortization of $262,253 and $215,234 at September 30, 2021 and December 31, 2020, respectively
530,422 564,911 
Total assets$2,708,997 $2,353,507 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses$284,094 $167,881 
Accrued compensation and benefits321,938 213,414 
Current portion of notes payable 4,688 
Current portion of operating lease liabilities14,396 15,032 
Deferred revenue17,904 11,004 
Other current liabilities2,854 10,938 
Total current liabilities641,186 422,957 
Notes payable, net of unamortized fees and premium842,027 857,961 
Deferred income taxes, net61,187 67,205 
Operating lease liabilities15,004 77,800 
Other long-term liabilities107,115 107,907 
Total liabilities1,666,519 1,533,830 
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value; 10,000 shares authorized; none issued and outstanding at September 30, 2021 and December 31, 2020
  
Common stock, $0.01 par value; 200,000 shares authorized; 49,836 issued and 47,275 outstanding at September 30, 2021 and 49,614 issued and 47,053 outstanding at December 31, 2020
498 496 
Additional paid-in capital480,364 468,726 
Treasury stock, at cost; 2,561 shares at September 30, 2021 and December 31, 2020
(119,143)(119,143)
Retained earnings680,729 469,558 
Accumulated other comprehensive income30 40 
Total stockholders’ equity1,042,478 819,677 
Total liabilities and stockholders’ equity$2,708,997 $2,353,507 

See accompanying notes to unaudited condensed consolidated financial statements.
1


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,
 2021202020212020
Revenue$877,800 $551,631 $2,621,190 $1,762,443 
Cost of revenue571,935 366,998 1,745,914 1,178,204 
Gross profit305,865 184,633 875,276 584,239 
Operating expenses:
Selling, general and administrative173,932 111,235 491,773 394,537 
Depreciation and amortization (exclusive of depreciation included in cost of revenue)26,104 26,936 74,098 69,096 
Total operating expenses200,036 138,171 565,871 463,633 
Income from operations105,829 46,462 309,405 120,606 
Interest expense, net, and other5,223 12,564 24,278 35,061 
Income before income taxes100,606 33,898 285,127 85,545 
Income tax expense26,583 7,831 73,956 24,188 
Net income$74,023 $26,067 $211,171 $61,357 
Other comprehensive income (loss):
Foreign currency translation and other11 (14)(10)(119)
Other comprehensive income (loss)11 (14)(10)(119)
Comprehensive income$74,034 $26,053 $211,161 $61,238 
Net income per common share:
Basic$1.55 $0.55 $4.43 $1.29 
Diluted$1.54 $0.55 $4.40 $1.29 
Weighted average common shares outstanding:
Basic47,737 47,476 47,666 47,406 
Diluted48,080 47,676 48,022 47,647 
 
See accompanying notes to unaudited condensed consolidated financial statements.

2


AMN HEALTHCARE SERVICES, INC.
 
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited and in thousands)
 Common StockAdditional
Paid-in
Capital
Treasury StockRetained EarningsAccumulated Other Comprehensive IncomeTotal
 SharesAmountSharesAmount
Balance, December 31, 201949,283 $493 $455,193 (2,561)$(119,143)$400,047 $152 $736,742 
Equity awards vested and exercised, net of shares withheld for payroll taxes140 1 (4,354)— — — — (4,353)
Cumulative-effect adjustment from adoption of the credit loss standard, net of tax— — — — — (1,154)— (1,154)
Share-based compensation— — 4,927 — — — — 4,927 
Comprehensive income (loss)— — — — — 12,965 (47)12,918 
Balance, March 31, 202049,423 $494 $455,766 (2,561)$(119,143)$411,858 $105 $749,080 
Equity awards vested and exercised, net of shares withheld for payroll taxes119 1 (289)— — — — (288)
Share-based compensation— — 6,347 — — — — 6,347 
Comprehensive income (loss)— — — — — 22,325 (58)22,267 
Balance, June 30, 202049,542 $495 $461,824 (2,561)$(119,143)$434,183 $47 $777,406 
Equity awards vested and exercised, net of shares withheld for payroll taxes8 — (158)— — — — (158)
Share-based compensation— — 3,772 — — — — 3,772 
Comprehensive income (loss)— — — — — 26,067 (14)26,053 
Balance, September 30, 202049,550 $495 $465,438 (2,561)$(119,143)$460,250 $33 $807,073 


 Common StockAdditional
Paid-in
Capital
Treasury StockRetained EarningsAccumulated Other Comprehensive IncomeTotal
 SharesAmountSharesAmount
Balance, December 31, 202049,614 $496 $468,726 (2,561)$(119,143)$469,558 $40 $819,677 
Equity awards vested and exercised, net of shares withheld for payroll taxes132 1 (5,259)— — — — (5,258)
Share-based compensation— — 9,287 — — — — 9,287 
Comprehensive income (loss)— — — — — 70,378 (24)70,354 
Balance, March 31, 202149,746 $497 $472,754 (2,561)$(119,143)$539,936 $16 $894,060 
Equity awards vested and exercised, net of shares withheld for payroll taxes78 1 (471)— — — — (470)
Share-based compensation— — 6,019 — — — — 6,019 
Comprehensive income— — — — — 66,770 3 66,773 
Balance, June 30, 202149,824 $498 $478,302 (2,561)$(119,143)$606,706 $19 $966,382 
Equity awards vested and exercised, net of shares withheld for payroll taxes12 — (527)— — — — (527)
Share-based compensation— — 2,589 — — — — 2,589 
Comprehensive income— — — — — 74,023 11 74,034 
Balance, September 30, 202149,836 $498 $480,364 (2,561)$(119,143)$680,729 $30 $1,042,478 

See accompanying notes to unaudited condensed consolidated financial statements.

3


AMN HEALTHCARE SERVICES, INC.
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)
 
Nine Months Ended September 30,
 
20212020
Cash flows from operating activities:
Net income$211,171 $61,357 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (inclusive of depreciation included in cost of revenue)75,871 70,077 
Non-cash interest expense and other(4,541)3,727 
Write-off of fees on credit facilities and senior notes158 1,773 
Change in fair value of contingent consideration (1,700)
Increase in allowance for credit losses and sales credits2,103 7,580 
Provision for deferred income taxes(4,328)(17,923)
Share-based compensation17,895 15,046 
Loss on disposal or sale of fixed assets386 3,664 
Amortization of discount on investments(41)(96)
Net loss on deferred compensation balances96 798 
Non-cash lease expense(257)244 
Changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable(196,342)15,151 
Accounts receivable, subcontractor(67,641)16,414 
Income taxes receivable5,472 6,157 
Prepaid expenses(5,695)(3,361)
Other current assets3,411 2,977 
Other assets780 3,378 
Accounts payable and accrued expenses112,183 (5,484)
Accrued compensation and benefits96,666 7,630 
Other liabilities(26,268)29,592 
Deferred revenue6,276 (32)
Restricted investments balance16 12 
Net cash provided by operating activities227,371 216,981 
Cash flows from investing activities:
Purchase and development of fixed assets(38,710)(27,357)
Purchase of investments(32,437)(37,418)
Proceeds from maturity of investments40,000 21,500 
Purchase of equity investment(500) 
Payments to fund deferred compensation plan(6,094)(7,171)
Proceeds from sale of equity investment78 303 
Purchase of convertible promissory notes (490)
Cash paid for acquisitions, net of cash and restricted cash received(41,264)(476,491)
Cash paid for other intangibles(90)(1,400)
Cash received for working capital adjustments for prior year acquisitions 66 
Net cash used in investing activities(79,017)(528,458)
4


 
Nine Months Ended September 30,
 
20212020
Cash flows from financing activities:
Payments on term loans(21,875)(203,125)
Proceeds from term loans 250,000 
Payments on revolving credit facility(70,000)(205,000)
Proceeds from revolving credit facility70,000 245,000 
Proceeds from senior notes 202,000 
Payment of financing costs (6,898)
Earn-out payments to settle contingent consideration liabilities for prior acquisitions(3,100)(10,622)
Cash paid for shares withheld for taxes(6,255)(4,798)
Net cash provided by (used in) financing activities(31,230)266,557 
Effect of exchange rate changes on cash(10)(119)
Net increase (decrease) in cash, cash equivalents and restricted cash117,114 (45,039)
Cash, cash equivalents and restricted cash at beginning of period83,990 153,962 
Cash, cash equivalents and restricted cash at end of period$201,104 $108,923 
Supplemental disclosures of cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities$35,066 $15,079 
Cash paid for interest (net of $248 and $300 capitalized for the nine months ended September 30, 2021 and 2020, respectively)
$19,301 $13,848 
Cash paid for income taxes$72,863 $30,727 
Acquisitions:
Fair value of tangible assets acquired in acquisitions, net of cash and restricted cash received$1,906 $35,704 
Goodwill28,135 274,427 
Intangible assets12,440 228,000 
Liabilities assumed(1,217)(61,640)
Net cash paid for acquisitions$41,264 $476,491 
Supplemental disclosures of non-cash investing and financing activities:
Purchase of fixed assets recorded in accounts payable and accrued expenses$5,080 $1,007 

See accompanying notes to unaudited condensed consolidated financial statements.
5


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 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, 2020, contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the Securities and Exchange Commission on February 26, 2021 (“2020 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 intangible assets purchased in a business combination, asset impairments, accruals for self-insurance, compensation and related benefits, accounts receivable, contingencies and litigation, contingent consideration liabilities associated with acquisitions, and income taxes. Actual results could differ from those estimates under different assumptions or conditions. The impact of the novel coronavirus (COVID-19) pandemic did not have a material effect on the Company’s estimates as of September 30, 2021.
Recently Adopted Accounting Pronouncements
In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2019-12, “Simplifying the Accounting for Income Taxes.” The standard is expected to reduce cost and complexity related to accounting for income taxes. The new guidance eliminates certain exceptions and clarifies and amends existing guidance to promote consistent application among reporting entities. Depending on the amended guidance within this standard, adoption is to be applied on a retrospective, modified retrospective or prospective basis. The Company adopted this standard effective January 1, 2021, and the adoption did not have a material effect on the Company’s consolidated financial statements.
In January 2020, the FASB issued ASU 2020-01, “Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.” The new guidance clarifies the interactions between accounting standards that apply to equity investments without readily determinable fair values. Specifically, it addresses the accounting for the transition into and out of the equity method. The Company adopted this standard effective January 1, 2021 on a prospective basis, and the adoption did not have a material effect on the Company’s consolidated financial statements.
Cash, Cash Equivalents and Restricted Cash
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents include currency on hand, deposits with financial institutions, money market funds, commercial paper and other highly liquid investments. Restricted cash and cash equivalents primarily includes cash 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.
6


 September 30, 2021December 31, 2020
Cash and cash equivalents$137,041 $29,213 
Restricted cash and cash equivalents (included in other current assets)18,118 18,626 
Restricted cash, cash equivalents and investments63,603 61,347 
Total cash, cash equivalents and restricted cash and investments218,762 109,186 
Less restricted investments(17,658)(25,196)
Total cash, cash equivalents and restricted cash$201,104 $83,990 
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 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:
20212020
Balance as of January 1,$7,043 $3,332 
Adoption of the credit loss standard, cumulative-effect adjustment to retained earnings 1,334 
Provision for expected credit losses325 5,178 
Amounts written off charged against the allowance(1,220)(1,333)
Balance as of September 30,$6,148 $8,511 

2. ACQUISITIONS
As set forth below, the Company completed two acquisitions from January 1, 2020 through September 30, 2021, which were accounted for 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 applicable date of acquisition. Since the applicable 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 analysis of information that has been made available through September 30, 2021. The allocations will continue to be updated through the measurement period, if necessary. The Company recognizes acquisition-related costs in selling, general and administrative expenses in the consolidated statements of comprehensive income.
Synzi and SnapMD Acquisition
On April 7, 2021, the Company completed its acquisition of Synzi Holdings, Inc. (“Synzi”) and its wholly-owned subsidiary, SnapMD, LLC (“SnapMD”). Synzi is a virtual care communication platform that enables organizations to conduct virtual visits and use secure messaging, text, and email for clinician-to-patient and clinician-to-clinician communications. SnapMD is a full-service virtual care management company, specializing in providing software to enable healthcare providers to better engage with their patients. The initial purchase price of $42,240 consisted entirely of cash consideration paid upon acquisition. The acquisition was funded primarily through borrowings under the Senior Credit Facility (as defined below). The results of Synzi and SnapMD have been included in the Company’s technology and workforce solutions segment since the date of acquisition. During the second quarter of 2021, $92 was returned to the Company in respect of the final working capital settlement.
The preliminary allocation of the $42,148 purchase price, which was reduced by the final working capital settlement, consisted of (1) $2,790 of fair value of tangible assets acquired, which included $884 cash received, (2) $1,217 of liabilities assumed, (3) $12,440 of identified intangible assets, and (4) $28,135 of goodwill, of which $6,085 is deductible for tax purposes. The provisional items pending finalization are income tax related matters and the assessment of additional information related to determining the fair value of certain assets acquired and liabilities assumed. The fair value of intangible assets primarily includes $10,890 of developed technology and $1,220 of trademarks with a weighted average useful life of approximately seven years.
Stratus Video Acquisition
7


On February 14, 2020, the Company completed its acquisition of Stratus Video, a remote video interpreting company that provides healthcare interpretation via remote video, over the phone, and onsite in-person, all supported by proprietary technology platforms. The initial purchase price of $485,568 consisted entirely of cash consideration paid upon acquisition. The acquisition was funded primarily through (1) borrowings under the Company’s $400,000 secured revolving credit facility (the “Senior Credit Facility”), provided for under a credit agreement (the “New Credit Agreement”), and (2) the Second Amendment (as defined in Note (6) below) to the New Credit Agreement, which provided $250,000 of additional available borrowings to the Company. The Senior Credit Facility, New Credit Agreement and Second Amendment are more fully described in Note (6), “Notes Payable and Credit Agreement.” The results of Stratus Video have been included in the Company’s technology and workforce solutions segment since the date of acquisition. During the second quarter of 2020, an additional $99 of cash consideration was paid to the selling shareholders in respect of the final working capital settlement. The Company incurred $10,548 of acquisition-related costs during the nine months ended September 30, 2020 as a result of its acquisition of Stratus Video.
The allocation of the $485,667 purchase price, which included the additional cash consideration paid for the final working capital settlement and was finalized during the first quarter of 2021, consisted of (1) $44,092 of fair value of tangible assets acquired, which included $9,176 cash received, (2) $56,059 of liabilities assumed, (3) $228,000 of identified intangible assets, and (4) $269,634 of goodwill, of which $10,182 is deductible for tax purposes. The intangible assets acquired have a weighted average useful life of approximately seventeen years. The following table summarizes the fair value and useful life of each intangible asset acquired as of the acquisition date:
Fair ValueUseful Life
(in years)
Identifiable intangible assets
Customer Relationships$171,000 20
Tradenames and Trademarks40,000 
5 - 10
Developed Technology16,000 5
Interpreter Database1,000 4
$228,000 
During the third quarter of 2020, the Company revised the estimated useful lives for the tradenames and trademarks intangible assets as a result of its plan to rebrand the language services business. Based on this change in circumstances since the date of acquisition, the Company determined that the remaining useful lives of the assets are 5 years and is amortizing the remaining value on a straight-line basis over the remaining useful life. The Company will continue to evaluate the remaining useful lives of other intangible assets impacted by its brand consolidation efforts.
Approximately $35,329 of revenue and $8,322 of income before income taxes of Stratus Video were included in the unaudited condensed consolidated statement of comprehensive income for the three months ended September 30, 2020. Approximately $78,080 of revenue and $13,787 of income before income taxes of Stratus Video were included in the unaudited condensed consolidated statement of comprehensive income for the nine months ended September 30, 2020.
Pro Forma Financial Information (Unaudited)
The following summary presents unaudited pro forma consolidated results of operations of the Company as if the acquisition of Stratus Video had occurred on January 1, 2019, which gives effect to certain adjustments, including acquisition-related costs of $1,023 and $11,662, that were reclassified from the three and nine months ended September 30, 2020, respectively, to the three and nine months ended September 30, 2019, respectively. The unaudited pro forma financial information is not necessarily indicative of the operating results that would have occurred had the acquisition been consummated as of the date indicated, nor is it necessarily indicative of the Company’s future operating results.
Three Months Ended September 30,Nine Months Ended September 30,
20202020
Revenue$551,631 $1,776,315 
Income from operations$50,465 $135,618 
Net income$29,030 $71,434 

3. REVENUE RECOGNITION
8


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 its software as a service (“SaaS”)-based technologies, including vendor management systems and scheduling software, and outsourced workforce services, including language interpretation and 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 under MSP arrangements are recorded in accordance with the accounting guidance on reporting revenue gross as a principal versus net as an agent. When the Company uses subcontractors and acts as an agent, revenue is recorded net of the related subcontractor’s expense. Revenue from permanent placement and outsourced workforce services is recognized as the services are rendered. Depending on the arrangement, the Company’s SaaS-based revenue is recognized either as the services are rendered or ratably over the applicable arrangement’s service period.
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. During the nine months ended September 30, 2021 and 2020, previously deferred revenue recognized as revenue was $10,515 and $11,408, respectively.
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.

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,
 2021202020212020
Net income$74,023 $26,067 $211,171 $61,357 
Net income per common share - basic $1.55 $0.55 $4.43 $1.29 
Net income per common share - diluted $1.54 $0.55 $4.40 $1.29 
Weighted average common shares outstanding - basic47,737 47,476 47,666 47,406 
Plus dilutive effect of potential common shares343 200 356 241 
Weighted average common shares outstanding - diluted48,080 47,676 48,022 47,647 
Share-based awards to purchase 21 and 26 shares of common stock were not included in the above calculation of diluted net income per common share for the three and nine months ended September 30, 2021, respectively, because the effect of these instruments was anti-dilutive. Share-based awards to purchase 84 and 79 shares of common stock were not included in the above calculation of diluted net income per common share for the three and nine months ended September 30, 2020, respectively, because the effect of these instruments was anti-dilutive.


9


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, rapid response nurse staffing and labor disruption, allied staffing, local staffing, and 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, recruitment process outsourcing, telehealth, credentialing, and flex pool management and other 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:
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Revenue
Nurse and allied solutions$627,049 $382,699 $1,908,195 $1,251,509 
Physician and leadership solutions150,663 109,116 430,523 355,580 
Technology and workforce solutions100,088 59,816 282,472 155,354 
$877,800 $551,631 $2,621,190 $1,762,443 
Segment operating income
Nurse and allied solutions$92,564 $52,923 $283,768 $173,706 
Physician and leadership solutions19,301 15,538 62,366 45,432 
Technology and workforce solutions47,210 25,680 131,952 62,814 
159,075 94,141 478,086 281,952 
Unallocated corporate overhead23,867 16,490 74,915 76,223 
Depreciation and amortization26,104 26,936 74,098 69,096 
Depreciation (included in cost of revenue)686 481 1,773 981 
Share-based compensation2,589 3,772 17,895 15,046 
Interest expense, net, and other5,223 12,564 24,278 35,061 
Income before income taxes$100,606 $33,898 $285,127 $85,545 
The following tables present the Company’s revenue disaggregated by service type:
Three Months Ended September 30, 2021
Nurse and Allied SolutionsPhysician and Leadership SolutionsTechnology and Workforce SolutionsTotal
Temporary staffing$627,049 $132,848 $ $759,897 
Permanent placement 17,815  17,815 
Outsourced workforce  58,802 58,802 
SaaS-based technologies  41,286 41,286 
Total revenue$627,049 $150,663 $100,088 $877,800 
10


Three Months Ended September 30, 2020
Nurse and Allied SolutionsPhysician and Leadership SolutionsTechnology and Workforce SolutionsTotal
Temporary staffing$382,699 $95,648 $ $478,347 
Permanent placement 13,468  13,468 
Outsourced workforce  38,159 38,159 
SaaS-based technologies  21,657 21,657 
Total revenue$382,699 $109,116 $59,816 $551,631 
Nine Months Ended September 30, 2021
Nurse and Allied SolutionsPhysician and Leadership SolutionsTechnology and Workforce SolutionsTotal
Temporary staffing$1,908,195 $379,814 $ $2,288,009 
Permanent placement 50,709  50,709 
Outsourced workforce  164,595 164,595 
SaaS-based technologies  117,877 117,877 
Total revenue$1,908,195 $430,523 $282,472 $2,621,190 
Nine Months Ended September 30, 2020
Nurse and Allied SolutionsPhysician and Leadership SolutionsTechnology and Workforce SolutionsTotal
Temporary staffing$1,251,509 $310,945 $ $1,562,454 
Permanent placement