AMN Healthcare Services (NYSE:AMN) reported higher third-quarter revenue as demand for travel nurses and allied healthcare professionals grew, while a favorable adjustment tied to past labor disruptions also boosted results.
Revenue rose 13% year over year to $717 million, or 6% excluding labor disruption activity. Net income increased to $33 million, or $0.83 per share, from $29 million a year earlier. Adjusted earnings were $1.16 per share, and adjusted EBITDA was $94 million.
The results included a $51 million favorable reserve adjustment related to past labor disruption events. Chief Financial and Operating Officer Brian Scott said third-quarter revenue was nearly 10% above the top of the company’s guidance range, reflecting strength in travel nurse and allied staffing as well as higher labor disruption revenue.
Labor disruption revenue totaled $59 million, compared with the $7 million assumed in guidance. Scott said the additional revenue consisted almost entirely of reserve adjustments associated with prior events. The adjustments increased consolidated gross margin by 520 basis points to 31.9%.
Staffing demand grows, but rates remain competitive
Nurse and Allied Solutions revenue rose 27% to $460 million, or 15% excluding labor disruption. Travel nurse volume increased 21% year over year and allied volume grew 12%. The average number of travelers across the segment was 3% higher than in the second quarter, which President and Chief Executive Officer Cary Grace said defied typical seasonality.
Grace said nursing and allied demand rose 70% from its February low through October. She attributed the company’s performance to both stronger market demand and improved fill rates across sales channels. She also said AMN was on track for its highest-ever Nurse and Allied productivity, including compared with the COVID-era peak in 2022.
Average bill rates remained flat year over year, however, and Grace characterized the market as highly competitive. Some clinicians have begun delaying bookings in anticipation of higher rates, she said. Although that behavior has historically preceded pricing increases, Grace said it was too early to call recent signs a trend.
International nurse revenue grew 32% year over year, but delays in embassy visa appointments are expected to constrain placements. AMN expects international revenue to decline in the low teens sequentially in the fourth quarter, followed by a smaller step down in the first quarter of 2027, Scott said. Grace said clinicians typically take four to five months to arrive after appointments.
Other businesses face pricing and volume pressures
Physician and Leadership Solutions revenue fell 4% year over year to $171 million, although it rose 4% sequentially. Locum tenens revenue declined 5% from a year earlier to $138 million, while search revenue grew 15%, helped by executive search and permanent physician placement.
Grace said AMN is working to improve speed and technology in its locum tenens business, with the aim of returning it to year-over-year revenue growth in 2027.
Technology and Workforce Solutions revenue declined 9% to $86 million. Within that segment, language services revenue fell 8% to $69 million as pricing declined 9% despite a slight increase in minutes. Vendor management system revenue fell 11% to $15 million.
Grace said she expects language services pricing pressure to moderate from high single digits this year to mid-single digits next year. AMN expects a broader global interpreter workforce to help recover margin in the first half of 2027. Scott said the language business’s gross margin was in the mid-30% range, compared with historical levels above 40%.
Fourth-quarter outlook and contract update
AMN projected fourth-quarter revenue of $655 million to $670 million, including $5 million from labor disruptions, compared with $124 million in disruption revenue in the fourth quarter of 2025. It forecast gross margin of 25.7% to 26.2% and adjusted EBITDA margin of 5.8% to 6.3%.
The company expects Nurse and Allied revenue to decline 13% to 15% year over year in the fourth quarter, but to grow by the same range excluding labor disruptions. Physician and Leadership Solutions revenue is expected to fall 5% to 7%.
Asked about a major client contract, Grace said Kaiser’s contract runs through the end of 2026 and is undergoing a competitive request-for-proposals process. She said AMN feels well-positioned, citing the strength of the partnership and the strike capabilities developed with and for Kaiser.
AMN ended the third quarter with $256 million in cash and equivalents and $750 million in debt. Operating cash flow was a use of $88 million during the quarter, which Scott attributed to refunds of most client deposits from previous labor disruption events. Some reserves and deposits from prior events remain, he said.
About AMN Healthcare Services (NYSE:AMN)
AMN Healthcare Services, Inc is a healthcare workforce solutions and technology company that helps hospitals, health systems, medical practices and other healthcare organizations recruit, deploy and manage clinical and nonclinical personnel. The company operates through a portfolio of staffing, workforce management and language-services businesses.
Its services include temporary and permanent placement of registered nurses, allied healthcare professionals and physicians, as well as locum tenens staffing for doctors and advanced practice professionals.
