Cross Country 2025 Q3 Earnings Sharp Earnings Decline and Revenue Drop

Cross Country Healthcare (CCRN) reported a significant earnings decline and revenue drop in Q3 2025, missing both revenue and earnings estimates. The company swung to a net loss of $0.15 per share, a 287.5% deterioration from the prior year, and revenue fell 20.6% year-over-year to $250.05 million. Guidance was suspended due to the pending Aya merger, and the stock’s post-earnings performance underperformed the market.

Revenue

Cross Country’s Q3 revenue fell sharply to $250.05 million, a 20.6% decline from $315.12 million in the prior year. The Nurse and Allied Staffing segment led the revenue stream with $201.95 million, while Physician Staffing contributed $48.10 million. Despite a 29% year-over-year growth in Homecare Staffing, the overall revenue contraction reflected broader challenges in key segments.

Earnings/Net Income

The company recorded a net loss of $4.77 million, or $0.15 per share, compared to a profit of $2.56 million, or $0.08 per share, in 2024 Q3. Adjusted EPS of $0.03 fell short of the $0.04 consensus, marking a 25% earnings surprise. The sharp decline in profitability underscores operational pressures and merger-related uncertainties.

Post-Earnings Price Action Review

The strategy of buying CCRN shares post-earnings announcements and holding for 30 days has underperformed over the past three years, with an annualized return of -14.89%. Despite a recent earnings miss, broader market dynamics and merger-related uncertainty have overshadowed short-term gains. The stock has declined 31.6% year-to-date, contrasting with the S&P 500’s 16.4% gain. Management’s commentary on the Aya merger and strategic initiatives will be critical for near-term price sustainability.

CEO Commentary

John A. Martins highlighted progress in Homecare Staffing and SG&A cost reductions via India’s low-cost center. The company’s $99 million cash balance and $20 million operating cash flow support technology investments. However, merger-related uncertainty persists, with no earnings guidance provided for the pending Aya transaction.

Guidance

Cross Country suspended forward-looking guidance and earnings calls due to the Aya merger. The Merger Agreement’s deadline was extended to December 3, 2025, pending FTC approval. No financial targets were disclosed, leaving investors to navigate strategic ambiguity.

Additional News

Cross Country’s pending merger with Aya Healthcare dominated recent news. The merger deadline was extended to December 3, 2025, with no changes to terms. Management emphasized progress in client retention and technology investments despite uncertainties. Analysts at Citizens reiterated a Market Perform rating, citing a 32% discount to the proposed merger price and conservative 2025 revenue/EBITDA forecasts. The company secured $400 million in contract value for Managed Service Program clients, underscoring operational focus ahead of the merger.