Healthcare staffing company AMN Healthcare Services (NYSE:AMN) beat Wall Street’s revenue expectations in Q3 CY2025, but sales fell by 7.7% year on year to $634.5 million. On top of that, next quarter’s revenue guidance ($722.5 million at the midpoint) was surprisingly good and 16.4% above what analysts were expecting. Its non-GAAP profit of $0.39 per share was 95.2% above analysts’ consensus estimates.
Is now the time to buy AMN? Find out in our full research report (it’s free for active Edge members).
AMN Healthcare Services (AMN) Q3 CY2025 Highlights:
- Revenue: $634.5 million vs analyst estimates of $618 million (7.7% year-on-year decline, 2.7% beat)
- Adjusted EPS: $0.39 vs analyst estimates of $0.20 (95.2% beat)
- Adjusted EBITDA: $57.51 million vs analyst estimates of $48.86 million (9.1% margin, 17.7% beat)
- Revenue Guidance for Q4 CY2025 is $722.5 million at the midpoint, above analyst estimates of $620.6 million
- Operating Margin: 7.5%, up from 3.2% in the same quarter last year
- Sales Volumes fell 10.6% year on year (-23.5% in the same quarter last year)
- Market Capitalization: $706.3 million
StockStory’s Take
AMN Healthcare Services’ third quarter was marked by a positive market reaction, reflecting stronger-than-expected results despite a year-on-year revenue decline. Management attributed the quarter’s outcome to a moderate recovery in staffing demand, improved extension rates, and higher-than-expected labor disruption activity—especially in Nurse and Allied Solutions. CEO Caroline Grace highlighted that “extension rates rebounded, and Travel Nurse winter orders came in slightly favorable to prior year,” while permanent hiring activity in the healthcare sector contracted. The company also benefited from stable bill rates and operational execution that mitigated some of the softness in underlying sales volumes.
Looking ahead, AMN Healthcare Services’ forward guidance is built on several moving parts, most notably robust labor disruption revenue, a modest rebound in staffing demand, and early signs of bill rate stabilization. Management pointed to a “healthy pipeline of strikes” and anticipated growth in international nurse placements as key contributors to margin stabilization in 2026. CEO Caroline Grace explained, “We expect bill rates for Nurse and Allied Staffing to be up modestly year-over-year in the fourth quarter for the first time in 3 years,” while also emphasizing the role of a diversified solutions portfolio and a shift toward higher-margin business lines in supporting future performance.
Key Insights from Management’s Remarks
Management attributed third quarter performance to an improving demand environment for contingent labor, strong execution in labor disruption support, and ongoing diversification across service offerings.
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Labor Disruption Revenue Impact: Third quarter results were boosted by higher-than-anticipated labor disruption activity, particularly in Nurse and Allied Solutions, which brought incremental revenue and temporarily supported segment gross margins.
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Contingent vs. Permanent Demand Shift: Management saw a notable decrease in permanent healthcare hiring, with employers instead seeking workforce flexibility through contingent staffing, reflecting a broader industry trend toward adaptable labor models as patient utilization edges up.
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Bill Rate Stabilization: After a prolonged period of declining or flat bill rates, AMN observed signs of bill rate stabilization and even slight increases for the upcoming quarter, positioning the company to better capture demand and improve operating leverage.
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Improved Client Retention and Satisfaction: Through investments in technology and customer service, AMN reported significant year-over-year gains in Net Promoter Score and client satisfaction, supporting its strategy to expand wallet share and deepen client relationships.
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International and High-Margin Services: Management identified international nurse placements and specialized high-margin services as tailwinds that are expected to drive a more favorable revenue mix and support margin recovery heading into next year.
Drivers of Future Performance
AMN’s outlook is shaped by continued labor disruption revenue, a gradual recovery in staffing demand, and a strategic focus on higher-margin business lines.
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Strike Activity Pipeline: Management anticipates sustained labor disruption activity through the next year, with a strong pipeline of strikes supporting revenue visibility in the near term and contributing to margin variability depending on event timing and scope.
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International Nurse and VMS Growth: The company expects a more favorable revenue mix in 2026, with international nurse placements projected to grow over 20% and vendor management system (VMS) headwinds beginning to subside, both of which are higher-margin businesses.
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Bill Rate and Margin Dynamics: While modest bill rate increases are expected for the first time in several years, management cautioned that competitive pricing and a slow improvement in permanent hiring may moderate the pace of margin recovery, though operating leverage from higher volumes remains a key target.
Catalysts in Upcoming Quarters
In future quarters, the StockStory team will be monitoring (1) the sustainability and scale of labor disruption revenue as a source of upside, (2) improvements in bill rate trends and contingent staffing demand beyond typical winter seasonality, and (3) margin recovery as the company shifts to higher-value international and technology-enabled services. Trends in healthcare workforce management and further client adoption of total talent solutions will also be key factors to watch.
AMN Healthcare Services currently trades at $19.50, up from $18.42 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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