Third-quarter revenue at AMN Healthcare Services Inc. (NYSE: AMN) rose 29.7% year over year to $1.14 billion.
The company reported all three business segments — nurse and allied solutions, physician and leadership solutions, and technology and workforce solutions — exceeded guidance and consensus revenue expectations.
However, consolidated gross margin narrowed, due primarily to higher clinician compensation and lower hours, partially offset by higher margins in its technology and workforce solutions segment.
AMN also noted a continuing elevated need for talent solutions in healthcare.
“AMN is collaborating with a broad spectrum of organizations and investing to create solutions to address the labor shortages that are expected to endure for years,” said CEO Susan Salka.
The company recently announced that former Aon and Bank of America executive Cary Grace will be taking over the president and CEO role from Salka, who announced her retirement earlier this year.
“With AMN in such a position of strength and a tremendous market need ahead, I am extremely excited about the next steps in the company’s evolution,” Salka said. “As recently announced, I will be handing the CEO baton over to Cary Grace soon, and I am confident she and our experienced leadership team are superbly prepared to ensure that AMN will continue to evolve and make an exceptional impact for all our stakeholders.”
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In the company’s nurse and allied solutions segment, travel nurse revenue grew 31% year over year, while allied revenue rose 39%. However, the businesses sequentially fell 25% and 8%, respectively.
Locum tenens revenue, which is included in AMN’s physician and leadership solutions segment, rose 19% year over year to $106 million, while interim leadership revenue increased 9%. However, revenue was flat in both when compared to the second quarter of 2022.
In AMN’s technology and workforce solutions segment, language services revenue was up 18% year over year — up 4% sequentially — to $56 million, while vender management system revenue was $60 million, up 80% year over year but down 20% from the prior quarter.
Guidance
AMN forecast fourth-quarter revenue will be $1.05 billion to $1.08 billion, a decrease of between 21% and 23% year over year, driven primarily by the continued decline in average travel nurse and VMS bill rates and hours worked, partially offset by an increase in healthcare professionals on assignment. Excluding labor disruption revenue, the company expects fourth quarter revenue to be down 16% to 18% year over year.
Forecast year-over-year changes by segment:
- Nurse and allied solutions revenue, down approximately 29%
- Physician and leadership solutions revenue, flat
- Technology and workforce solutions revenue, up approximately 10%
Share price and market cap
Shares in AMN were up 1.25% to $125.64 as of 9:41 a.m. Eastern time; they were 2.70% below the 52-week high, according to FT.com. The company had a market cap of $5.37 billion.