AMN’s Labor Disruption Revenue Surges—But Can It Last?

Date of Call: Feb 19, 2026

Financials Results

• Revenue: Q4 2025: $748M, up 2% YOY and up 18% sequentially. Full year 2025: $2.73B, down 8% YOY.
• EPS: Q4 2025 GAAP loss per share: $0.20. Adjusted EPS: $0.22, compared with $0.75 prior year and $0.39 prior quarter. Full year 2025 GAAP loss per share: $2.48. Adjusted EPS: $1.36, compared with $3.31 prior year.
• Gross Margin: Q4 2025 consolidated gross margin: 26.1%, slightly above guidance high end, down 370 basis points YOY and down 300 basis points sequentially. Full year 2025 gross margin: 28.3%, down 250 basis points YOY.
• Operating Margin: Q4 2025 adjusted EBITDA margin: 7.3%, down 290 basis points YOY and down 180 basis points sequentially. Full year 2025 adjusted EBITDA margin: 8.6%, down 280 basis points YOY.

Guidance:

• Q1 2026 consolidated revenue projected at $1.225B to $1.24B, including ~$600M labor disruption revenue.
• Gross margin projected between 23.5% and 24%, with ~300 basis point drag from labor disruption.
• Operating margin expected at 5.9% to 6.5%. Adjusted EBITDA margin expected at 9.7% to 10.2%.
• Reported SG&A projected at 14.5% to 15% of revenue.
• Expect Allied International and Search to return to YOY growth in Q1; other businesses to follow in coming quarters.
• Excluding labor disruption, path to 4% to 6% sustainable organic revenue growth annually, with operating expenses growing at half the rate, leading to 10% to 15% adjusted EBITDA growth.

Business Commentary:

Labor Disruption Revenue Surge:

• AMN Healthcare reported labor disruption revenue of $124 million in Q4 2025, nearly double the year-ago quarter.
• This increase was driven by significant labor disruption events, with expectations for even more revenue in Q1 2026, anticipated to contribute $600 million to the quarter.

Nurse and Allied Solutions Performance:

• The Nurse and Allied Solutions segment reported revenue of $491 million in Q4 2025, up 8% year-over-year.
• The growth was supported by higher-than-anticipated labor disruption revenue and strong demand in the Schools business, although excluding disruption, the segment saw a 7% year-over-year decline.

Physician and Leadership Solutions Outlook:

• In Q4 2025, the Physician and Leadership Solutions segment reported revenue of $170 million, down 2% from the previous year.
• The decrease was due to seasonality in locum tenens and a decline in search revenue, with expectations for a continued decline of 5% to 8% year-over-year in Q1 2026.

Technology and Workforce Solutions Challenges:

• The Technology and Workforce Solutions segment saw a 18% year-over-year decline in revenue, with Language Services down 9% and VMS revenue down 28%.
• The decline was attributed to price competition and the sale of the Smart Square business, with a focus on a new tiered service strategy to address these challenges.

Sentiment Analysis:

Overall Tone: Positive

• Caroline Grace stated, "We are pleased to review our 2025 accomplishments and highlight what we expect looking ahead." She also noted, "I am profoundly impressed by the energy, commitment and teamwork we have sustained." The company reported labor disruption revenue nearly doubled YOY in Q4, anticipates significantly more in Q1, and sees a path to sustainable organic revenue growth and EBITDA expansion.

Q&A:

• Question from Jeffrey Silber (BMO Capital Markets Equity Research): Since the labor disruption business is such a big part of 4Q and expected to continue in this quarter, I just wanted to drill down a little bit on there. Do you have like either separate operating procedure, separate sales force for this? How do you make sure that it doesn't disrupt the rest of your business?
  Response: Management has a dedicated strike team, a playbook, and technology built over two years to support large events with minimal disruption to core business. They successfully managed significant events with high fill rates and some marginal impact on core business.

• Question from Jeffrey Silber (BMO Capital Markets Equity Research): I know the stock market is a bit jittery about AI disrupting a bunch of different businesses. And specifically with your company, I think some of the recent stock pressure might have been because of some fears on your language translation business. Can you talk a little bit about that in terms of what you think the risks might be and how you're countering them?
  Response: Language services are clinical and regulated to require human interpreters; AI is used for nonclinical interactions. Risks are not from AI but from competitive pricing pressure, which they are countering with a new tiered service strategy in trial.

• Question from Albert Rice (UBS Investment Bank, Research Division): First, just following up on the labor disruption situation. The nurses that you get to fill an uptick that involves $600 million of incremental revenues in the first quarter, are those people that are generally known to you and have taken travel assignments before? Are you getting them from a new source? And do those then become people that you can use to have in your pipeline for future assignments?
  Response: Clinicians come from a mix of known travelers, per diems, and new suppliers; high fill rates and good experiences create opportunities for future assignments in core business or other events.

• Question from Albert Rice (UBS Investment Bank, Research Division): We've gotten some questions about the Kaiser contract overall, which obviously is a big factor here, that relationship and partnership. I know that doesn't really mature until later in the year. I don't think maybe the end of the year. Is there any update because of all of this that maybe that gets reworked early, and it gets put to bed early?
  Response: Contract with Kaiser ends this year; they are expected to go through an RFP as part of normal governance, but partnership remains strong and deep.

• Question from Albert Rice (UBS Investment Bank, Research Division): It looks like the March Visa Bulletin was published today and is advancing the retrogression date by 4 months and then you get 2 months of improvement in Philippines. That's sort of meaningful, it seems like to me. Is that enough to change the way you look at the international staffing business for '26?
  Response: Visa bulletin advancement is positive, supporting mid-teens growth expectation for international staffing in 2026, a higher-margin business.

• Question from Kevin Fischbeck (BofA Securities, Research Division): I wanted to follow back up on that point about the labor pool and the strike disruption. Does it in any way crowd out your ability to staff other projects? Is there like a headwind in the core business as a result of this that we should be thinking about when this business goes away? Is there an uplift? Or is that completely separate and not an issue?
  Response: No meaningful crowding out; core business continues to see strong demand. Strike events are concentrated geographically; clinicians often prefer structured assignments, but high fill rates indicate pricing is right.

• Question from Kevin Fischbeck (BofA Securities, Research Division): Yes. I was going to kind of segue to kind of follow up on that. Just that I guess the way that you kind of been characterizing the softness in the business more recently is that there's a lot of demand from the hospitals, but just not at the right clearing price. I guess like the strike revenue is probably at a higher clearing price. And -- so I'm trying to figure out how much we should be thinking about of the higher fill rates as a relationship to that dynamic just that the rates are higher, and therefore, it's just easier to fill because you're hitting that price point versus some of the things that you've talked about that might actually be more kind of positive indicators as it relates to Q2, 3, 4, to the rest of the year?
  Response: In crisis, pricing is set right to fill quickly; non-strike business similarly fills when priced right. As hiring trends normalize, more constructive pricing conversations are expected, aiding fill rates.

• Question from Kevin Fischbeck (BofA Securities, Research Division): And then just last question. On the AI disruption potential, I wasn't sure I was 100% following because it sounds like you guys feel like the business has some in-place moat to it that you really can't be disrupted because of the regulatory aspect of face-to-face, but it also sounds like you're responding and changing your pricing and you're seeing pressure on that business at the same time. So just are those separate dynamics that are causing it and it's not AI, it's something else? Or how should we be thinking about that?
  Response: AI is not the driver; pricing pressure is from aggressive competitor consolidation and immigration policies. Regulatory moat remains intact for clinical services; AI is seen as accretive to productivity and speed across other businesses.

• Question from Trevor Romeo (William Blair): I wanted to ask about your guidance and specifically the margin piece. I know it is probably very difficult to fully strip out the strike business. But just any help you can give us on kind of what underlying margins with a normal level of labor disruption revenue would look like and what's embedded in the Q1 guidance from that perspective?
  Response: Excluding $600M labor disruption, underlying revenue is $625M-$640M; gross margin would be ~26.8%-27%, slightly down from Q4. SG&A ~130-135M, adjusted EBITDA similar to Q4 run rate excluding strike.

• Question from Trevor Romeo (William Blair): Okay. That's helpful. And then I guess I just wanted to follow up on the long-term targets. You talked about, I guess, 4% to 6% organic growth on the top line beyond this year. Just given that there have been a lot of changes to some of your businesses over the last few years, would love to narrow down what are your expectations for each of the segments over the long term? And maybe just the moving pieces that could get you to the bottom end or the top end of those ranges would be great.
  Response: Expect recovery to YOY growth in Q1 for Search and International, with all segments returning to growth through 2026-2027. 4%-6% organic growth is reasonable, driven by normalized demand and market share gains; operating leverage and AI will drive double-digit EBITDA growth long-term.

• Question from Tobey Sommer (Truist Securities, Inc., Research Division): I wanted to ask a question about seasonality past the first quarter. Sometimes after the winter period where there's seasonally better demand, Travel Nurse and perhaps sometimes Allied can be down sequentially in 2Q to the extent you care to, could you comment about seasonal patterns that you expect to unfold for the balance of the year?
  Response: Normal seasonal decline in Nurse & Allied from Q1 to Q2; Allied Schools softens in summer. Physician & Leadership should grow sequentially. Technology & Workforce Solutions likely flat ex-strike. Overall, Q2 ex-strike is expected to be flattish.

• Question from Tobey Sommer (Truist Securities, Inc., Research Division): And just one question on the strike for me with the $600 million. Is there a date upon which if the strikes end prior to that, that it will be less than $600 million and a period of time that it would be perhaps greater than that just as we ride out the rest of the quarter, how do we interpret news flow relative to those numbers?
  Response: Guidance reflects current visibility; if strikes extend, they will not provide predictions beyond current line of sight.

• Question from Tobey Sommer (Truist Securities, Inc., Research Division): Got you. And one more for me, if I could. There was a study out about the relative pricing and cost of full-time nurse labor versus contingent staff that showed things close to parity. In the context of these strikes, which invariably end in a new contract that guarantees full-time comp increases, what's your expectation for bill rates in that relationship between contingent travel nurses and their full-time equivalents?
  Response: Contingent labor offers cost parity and flexibility; expect bill rates to stabilize and increase in 2026 to reflect underlying wage expectations, which began to appear in pockets in 2025.

• Question from Mark Marcon (Robert W. Baird & Co. Incorporated): Most of mine have been asked, but just going on the strike, if it continues, are there any sort of downsides that you foresee in terms of just the reputation or the branding with regards to other nurses that may not participate in a strike or anything along those lines or from a legislative perspective? And then obviously, unions are typically averse to travel nursing and any sort of legislative pressure they might put on.
  Response: Supporting clients during strikes is crucial for continuity of care; it is a service requested by strategic clients. Unions require this support to strike legally; the business enhances AMN's ability to offer diverse roles to clinicians.

• Question from Mark Marcon (Robert W. Baird & Co. Incorporated): Great. And then can you give us -- so just if we take a look at that $600 million, you basically said that's through -- is that through today in terms of the day? And so therefore, we can calculate what the revenue per day is, and therefore, we could -- if the strikes continue, we could basically assume that there's further upside with regards to the estimates that you provided. Is that a correct way to look at it?
  Response: Revenue per day is not static; needs are dynamic with union members returning at different times. Upside assumption oversimplifies the dynamic nature of strike events.

• Question from Mark Marcon (Robert W. Baird & Co. Incorporated): Okay. Great. And then just on the 4% to 6% long-term growth rate, are you being a little conservative? Just when we take a look at the patient and clinician demographics, from a longer-term perspective, it looks like we should end up seeing some very healthy long-term demand. So I'm just kind of wondering how you're thinking about that. Or are you thinking just long term, meaning just '27, '28? Or is that truly long term?
  Response: The 4%-6% range is prudent to account for external economic forces; AMN will strive to exceed it through market share gains. The framework is helpful given stabilization and recovery trends, with more detailed guidance provided quarterly.

• Question from Constantine Davides (Citizens JMP Securities, LLC, Research Division): Brian, I guess, first question for you. Anything you can articulate around cash flow expectations for the year? And I guess I'm thinking specifically of what you might see in the first quarter with the outside strike benefit, but any other factors we should be contemplating? I know you took CapEx way down in '25. So wondering if that's the right level for '26 as well. But any kind of factors or considerations on cash flow?
  Response: CapEx expected in low-to-mid $40M range, allowing investment in enhancements and AI. 2025 free cash flow conversion was high due to working capital; 2026 will have a working capital drag but remain healthy. Leverage ratio expected below 3x LTM in Q1.

• Question from Constantine Davides (Citizens JMP Securities, LLC, Research Division): Great. I appreciate that color, Brian. And then, Cary, just I guess, any commentary around pipeline for new business in Nurse and Allied? And I guess, specifically, what are you seeing in terms of volume of opportunities this part in '26 versus maybe what you saw last year and any kind of trends you'd call out?
  Response: Pipeline is healthy and broad-based, with wins in both MSP and vendor-neutral segments expected to convert. Focus on direct opportunities and cross-selling to existing clients continues to show momentum.

• Question from Jack Slevin (Jefferies LLC, Research Division): Congrats on the quarter. And I appreciate you sneaking me in here at the end of the call. I'll just leave it to one. Most of mine have been asked. And I don't know if it's just me, but I guess the size of the strike number is frankly a little disorienting, and I'm still sort of just coming out of it on that one. So maybe just to like level set on expectations. I know you don't guide for the full year, but that '26 base scenario you had sort of talked about in January at a conference. I guess when you think about the 1Q guide ex strike, and I know it's a little hard to parse those numbers, but sort of that trajectory and the trajectory in general of the business versus sort of how you've been speaking to it earlier this year, it seems like it's a little better, but I'd just love to get your thoughts like maybe more specifically on the margin front about are things shaping up the way that you've been thinking about when we try to parse away as best we can this big opportunity you've got in front of you in the first quarter?
  Response: Business trends excluding strike are consistent with earlier expectations. Strike importance to clients and zero revolver balance are positives. The events tested and validated AMN's enhanced platform and automation, increasing confidence for future demand. AI tool deployment is accelerating and transferable to core business.

Contradiction Point 1

Financial Impact and Outlook for Labor Disruption Business

Contradiction on whether disruption revenue is a drag or a benefit to margins.

What are your thoughts on the recent market trends? - Trevor Romeo (William Blair)

2025Q4: Excluding the $600 million labor disruption revenue, Q1 revenue would be $625-640 million. Gross margin, which has a ~300 bps drag from disruption, would be around 26.8-27%. - [Brian Scott](CFO)

Could you clarify the underlying margins without labor disruption and what factors are included in Q1 guidance? - Jack Slevin (Jefferies)

20251107-2025 Q3: The Labor Disruption event provided a ~100 bps gross margin benefit in Q3 (due to timing) and is expected to be a drag in Q4. - [Brian Scott](CFO)

Contradiction Point 2

Gross Margin Trajectory Excluding Labor Disruption

Contradiction in the expected direction of gross margin movement from Q3 to Q4 when excluding disruption.

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2025Q4: Excluding the $600 million labor disruption revenue, Q1 revenue would be $625-640 million. Gross margin... would be around 26.8-27%, slightly down from Q4. - [Brian Scott](CFO)

What are underlying margins excluding labor disruption and what's included in Q1 guidance? - Trevor Romeo (William Blair & Company L.L.C.)

20251107-2025 Q3: Normalizing both Q3 and Q4, the sequential change is ~100 bps. - [Brian Scott](CFO)

Contradiction Point 3

Growth Outlook for International Staffing

Expectations for International staffing growth in 2026 differ significantly.

What are your thoughts on the recent market trends impacting the sector? - Albert Rice (UBS Investment Bank, Research Division)

2025Q4: The visa bulletin advancement is positive... supports the company's expectation for mid-teens growth in International staffing in 2026. - [Caroline Grace & Brian Scott](CFO & COO)

Will the recent visa bulletin advancement's impact on international staffing alter your 2026 outlook? - Jack Garner Slevin (Jefferies)

2025Q2: International is expected to return to modest growth in Q4... achieve double-digit revenue and EBITDA growth in 2026 under conservative scenarios. - [Caroline Sullivan Grace](CEO)

Contradiction Point 4

Gross Margin Expectations for Q4 and Beyond

Contradiction on Q4 adjusted EBITDA margin being a floor versus a decline from prior guidance.

What are your thoughts on the recent earnings report, Trevor Romeo (William Blair)? - Trevor Romeo (William Blair)

2025Q4: Excluding the Labor Disruption revenue, the underlying adjusted EBITDA run rate is similar to Q4 when stripping out strike. - [Brian Scott](CFO)

What are underlying margins adjusted for labor disruptions, and what factors are included in Q1 guidance? - Jack Slevin (Jefferies LLC)

2025Q3: Yes, the Q4 adjusted EBITDA margin (mid-6% range) is considered a reasonable floor. From there, margin improvement can be driven by factors like international nurse revenue growth, VMS recovery, and consistent bill rate increases expected in 2026. - [Brian Scott](CFO)

Contradiction Point 5

Financial Impact and Outlook for Labor Disruption Business

The characterization of labor disruption revenue's predictability and financial impact appears inconsistent.

Can you provide more details on the recent revenue growth? - Tobey Sommer (Truist Securities, Inc.)

2025Q4: The $600 million estimate is based on the current situation. If strikes continue beyond the quarter, the company will not attempt to predict further duration... - [Brian Scott](CFO & COO)

Regarding the $600 million strike revenue, how does the timing of strikes ending early or continuing past quarter-end affect the revenue figure? - Mark Steven Marcon (Robert W. Baird)

2025Q2: The $5M is a conservative base based on contracted work. There is potential upside in Q3 and Q4. The larger opportunity is expected in Q4 and Q1 2026. - [Caroline Sullivan Grace & Brian M. Scott](CEO)