[Management View]
AMN Healthcare's management emphasized strategic adjustments in response to market challenges, including competitive pricing pressures and government policy uncertainties. Key metrics included a revenue of $658 million, at the high end of guidance, and a gross margin of 29.8%, exceeding expectations. Strategic priorities focused on diversified solutions, automation, and technology platforms.

[Outlook]
Management provided guidance for Q3 2025, projecting consolidated revenue between $610 million-$625 million and gross margin between 28.7% and 29.2%. They anticipate double-digit growth in the allied school business and international nurse staffing in 2026, driven by improvements in visa retrogression.

[Financial Performance]
Q2 2025 revenue was $658 million, down 11% YoY. Adjusted EBITDA was $58 million, down 38% YoY. The GAAP net loss was $116 million, primarily due to impairment charges. Nurse and Allied revenue decreased 14% YoY, while travel nurse revenue declined 25% YoY.

[Q&A Highlights]
Question 1: How are clients thinking about contingent labor needs amidst uncertainties?
Answer: Demand stabilized in nurse staffing and increased in allied and locum segments starting July. Clients are normalizing contingent labor utilization, with premium contingent costs down to high single digits. Broader conversations are emerging about managing a cost-effective workforce, with interest in predictive analytics and program management.

Question 2: What drove the improvement in gross margins for Nurse and Allied segments?
Answer: Gross margin improvement was driven by stable underlying spreads, favorable mix, payroll tax benefits, and high-margin international perm placement revenue. Management expects stable margins moving forward.

Question 3: When might we see year-over-year growth again?
Answer: Stabilization in academic medical centers' volumes and extension rates rebounding suggest potential growth in Q4 2025. Management is proactively improving fill rates and building MSP opportunities to access more orders.

Question 4: Are hiring freezes leading to more travel nurse assignments?
Answer: Healthy supply exists, and demand is driven by attractive pay packages. Locum demand remains strong, requiring competitive pay to secure assignments.

Question 5: What is the current MSP activity and market share dynamics?
Answer: Post-COVID, clients are open to new models, with a slight bias back to supplier-led MSPs. AMN is serving clients in various models, maintaining market share amidst competitive dynamics.

Question 6: How do we reconcile Q3 guidance with revenue and margin expectations?
Answer: SG&A improvements are due to process changes and SmartSquare sale impact. Gross margin decline is partly due to SmartSquare divestiture, with stable margin profiles across businesses.

Question 7: What is the growth outlook for language services?
Answer: Utilization grew mid-single digits, offset by competitive pricing pressure. Management expects pipeline progression to drive stronger top-line growth.

Question 8: How is AMN positioned amidst competitive pressures and consolidation?
Answer: AMN aims to gain market share through strategic client wins, expansions, and higher fill rates. Differentiated solutions like strike support and Passport platform enhance competitive positioning.

Question 9: What is the outlook for international nurse staffing?
Answer: Modest growth expected in Q4 2025, with double-digit growth in 2026 as visa retrogression improves. Strong client demand and pipeline support future growth.

Question 10: What are the financial implications of SmartSquare divestiture and cash flow expectations?
Answer: SmartSquare sale proceeds will offset client deposit repayments, with cash balance expected around $30 million by Q3 end. Continued debt reduction is anticipated.

[Sentiment Analysis]
Analysts expressed cautious optimism, noting stabilization in demand and strategic initiatives. Management maintained a proactive tone, focusing on operational efficiency and growth opportunities.

[Quarterly Comparison]
| Metric | Q2 2025 | Q2 2024 | Q1 2025 |
|--------|---------|---------|---------|
| Revenue | $658M | $739M | $692M |
| Gross Margin | 29.8% | 31.0% | 28.7% |
| Adjusted EBITDA | $58M | $93M | $64M |
| Net Loss | $116M | $16M | $1M |

[Risks and Concerns]
Risks include government policy impacts, competitive pricing pressures, and potential declines in staffing orders. Impairment charges significantly affected financial results.

[Final Takeaway]
AMN Healthcare navigates a challenging market environment with strategic adjustments and proactive measures. Despite revenue declines, management focuses on stabilizing demand, enhancing operational efficiency, and leveraging technology platforms. The outlook for Q3 2025 remains cautious, with potential growth in allied and international nurse staffing anticipated in 2026. Investors should monitor legislative developments and competitive dynamics impacting the healthcare staffing industry.