Cross Country 2025 Q3 Earnings Sharp Net Loss as Revenue Dips 20.6%

Cross Country Healthcare (CCRN) reported fiscal 2025 Q3 results marked by a significant decline in revenue and a shift to a net loss. The company’s performance missed expectations, with no forward guidance issued due to the pending Aya merger.

Revenue

Third-quarter revenue fell 20.6% year-over-year to $250.05 million, driven by declines in both Nurse and Allied Staffing ($201.95 million) and Physician Staffing ($48.10 million) segments. While the Nurse and Allied Staffing division accounted for 81% of total revenue, the Physician Staffing segment contributed 19%, reflecting broader industry challenges.

Earnings/Net Income

The company posted a net loss of $4.77 million, or $0.15 per share, marking a 286.8% deterioration from a $2.56 million profit in 2024 Q3. Adjusted EPS of $0.03 missed expectations, signaling operational strain despite cost-cutting efforts. The earnings decline underscores the negative impact of volume losses and merger-related costs.

Post-Earnings Price Action Review

The strategy of buying CCRN shares following a quarterly revenue raise and holding for 30 days yielded an annualized return of -14.95% over three years, underperforming the market. This highlights the limitations of relying solely on earnings reports for investment decisions, as the stock’s volatility reflects merger uncertainty and operational challenges.

CEO Commentary

CEO John A. Martins emphasized progress in Homecare Staffing, which grew 29% YoY, and cost reductions from India-based operations. He highlighted $99 million in cash and no debt as strengths, while acknowledging the Aya merger’s regulatory delays. Operational focus remains on securing $400 million in Managed Service Program contracts.

Guidance

Forward-looking guidance was suspended due to the pending Aya merger, with the FTC review extending the merger deadline to December 3, 2025. The company will not host an earnings call, reflecting uncertainty in regulatory approval and operational clarity.

Additional News

Cross Country’s merger with Aya Healthcare remains pending, with the agreement deadline extended to December 3, 2025. The FTC review, delayed by the government shutdown, has heightened uncertainty. Meanwhile, the company secured $400 million in new contracts for Managed Service Programs. Analysts at Citizens reiterated a Market Perform rating, citing a 32% discount to the proposed merger price and reduced 2025 revenue and EBITDA forecasts.

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