AMN Healthcare Services, Inc. (AMN) Q2 2026 Earnings Report, Transcript and Summary

Good afternoon, ladies and gentlemen, and welcome to the AMN Healthcare Second Quarter 2026 Earnings Conference Call. [Operator Instructions] This call is being recorded on Thursday, August 6, 2026. And I would now like to turn the conference over to Randy Reece, Vice President of Investor Relations. Thank you. Please go ahead.

Good afternoon, everyone. Welcome to AMN Healthcare's Second Quarter 2026 Earnings Call. A replay of this webcast will be available at ir.amnhealthcare.com at the conclusion of this call. Remarks we make during this call about future expectations, projections, trends, plans, events or circumstances constitute forward-looking statements. These statements reflect the company's current beliefs based upon information currently available to it. Our actual results may differ materially from those indicated by these forward-looking statements because of various factors and cautionary statements, including those identified in our most recently filed Forms 10-K and 10-Q, our earnings release and subsequent filings with the SEC. The company does not intend to update guidance or any forward-looking statements provided today prior to its next earnings release. This call contains certain non-GAAP financial information. Information regarding and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release and on our financial reports page at ir.amnhealthcare.com. On the call with me today are Cary Grace, President and Chief Executive Officer; and Brian Scott, Chief Financial and Operating Officer. I will now turn the call over to Cary.

Thank you, Randy, and good afternoon, everyone. We appreciate you joining us today. I am pleased to report that our second quarter results came in better than we forecasted with 5 of our solutions growing revenue year-over-year. Second quarter consolidated revenue was $673 million, 6% above the high end of our guidance range and 2% higher year-over-year. Adjusted EBITDA was $73 million or 10.9% of revenue, up 26% year-over-year. Adjusted EPS came in at $0.77 compared with $0.30 in the year ago quarter. And we ended the quarter with $362 million in cash on our balance sheet, providing us with the ability to invest in our long-term strategy, including acquisition opportunities. We used our strong financial position to make 2 small yet strategic acquisitions that extend and advance our capabilities. Our performance year-to-date demonstrated our effectiveness in balancing day-to-day execution while simultaneously handling large labor disruption events. While there were some unique items in our results, I am very encouraged to report that our core earnings exceeded guidance with building momentum that lifts our third quarter outlook. With contingent labor rates at a historically low premium to permanent staff, more clients are using flexible labor to meet their increasing patient demand. There is also continued interest in broader workforce optimization and tech-enabled talent solutions to build sustainable workforces. As the leader and innovator in total talent solutions, AMN is well positioned to support these market and client needs. Our second quarter performance was highlighted by revenue strength in our travel nurse, international nurse, allied, schools and search businesses. Our Nurse and Allied Solutions segment drove the favorable surprise in the second quarter in several ways. Segment revenue of $422 million grew 11% year-over-year and was 12% ahead of the consensus estimate. Nurse and Allied revenue benefited from higher volume on increased demand as well as higher-than-expected labor disruption revenue. Segment gross margin was 28.4%, with underlying margins in line with our expectations, along with several beneficial factors specific to the quarter. Travel nurse volume showed 6% year-over-year growth and Allied volume grew 7%, both the highest growth rate these businesses have achieved in 4 years. Improving demand and strong fulfillment drove our performance. Year-over-year, travel nurse orders turned positive in May and accelerated in June. As of early August, the improvement continued with orders up about 40% year-over-year and 20% higher than August 2024. As expected, international nurse had 23% year-over-year revenue growth in the second quarter. While we continue to benefit from the forward movement in Visa application cutoff dates, Embassy appointments for Visa applicants have not kept pace. Relief from the Embassy backlog will influence how much this business grows in 2027. Allied orders showed modest year-over-year growth in the first quarter and accelerated through the second quarter with mid-teens growth rates in June and July. Allied demand strength is broad-based in terms of settings and specialties. Notably, our schools business is on track for another year of double-digit revenue growth for the upcoming school year. Our team is executing very well against this higher demand with high fill rates, which fueled the second quarter outperformance and continued volume momentum. Third quarter guidance includes better than 10% year-over-year volume growth for both travel nurse and allied. As demand increases, we are benefiting from our multiyear focus on process automation, 24/7 business operations and AI enablement of recruiting, resulting in higher fill rates across our MSP, VMS and third-party platforms. For the third quarter, we expect Nurse and Allied segment revenue to grow 9% to 11% year-over-year. Physician and Leadership Solutions segment revenue in the second quarter was $165 million, lower by 6% year-over-year and in line with guidance. Segment gross margin was 26.5%, down year-over-year, though modestly up from the first quarter. We saw a positive inflection in the second quarter from our search business, which produced 27% year-over-year revenue growth. New demand showed strong growth across physician and executive search. While the higher demand is being driven by executive turnover and facility expansion, growth is coming also from stronger positioning of AMN solutions in the market, with particular strength in academic medical centers. We are leveraging our market leadership in health care search to broaden our capabilities into adjacent services. In June, we acquired the ESSENTIAL Brand Leadership Assessment solution to support clients in leadership selection, evaluation and coaching as well as succession planning. Locum tenens revenue in the second quarter was $131 million, lower by 8% year-over-year and in line with guidance. We continue to see more locum demand growth in vendor-neutral third-party channels, which are the most competitive to fill. Our locums business is going through the same process and technology transformation that enabled our nurse and allied business segment to compete successfully across all demand channels. Interim leadership revenue was $22 million, down 3% from prior year. New searches have been building over the past quarter, which is a reflection of our leading market position, increased investments in our sales team and a growing wave of turnover and project-based needs in health care leadership positions. We are optimistic about the direction of demand and our ability to pursue year-over-year growth in 2027. For the third quarter, we project Physician and Leadership Solutions revenue to be down 5% to 7% year-over-year. Technology and Workforce Solutions segment revenue was $87 million in the second quarter, down 15% year-over-year and in line with guidance. Segment gross margin was 48.6%, lower sequentially and year-over-year. Language services revenue of $70 million was down 8%, with VMS revenue of $15 million, down 20% from a year ago. Language services volume was flat year-over-year, while pricing was down 8%. Pricing will remain a headwind as we work through new client wins and renewals. The rollout of our lower-cost core service tier continues to be well received, helping us compete more broadly in the market and win new clients. We are expanding our workforce globalization for service delivery over the next several quarters to stabilize and improve gross margin. In June, we acquired Jaide Health to extend our medically qualified language interpretation services with AI-enabled support for the patient before and after the clinical interaction. The Jaide platform improves the ability of limited English proficiency patients to communicate through the intake and discharge processes, further strengthening our value proposition of enabling high-quality and cost-effective patient care. We also continue to strengthen our WorkWise labor force management optimization and engagement platform. We are seeing increasing interest in data and analytics to help drive workforce optimization. Last quarter, we introduced enhancements to our dashboards, including supplier performance and insights with third-party bill and pay rate intelligence that can be segmented by skill set and geographic markets. We built our strongest solution yet to empower data-driven workforce decision-making. And we continue to enhance the features of our market-leading Passport app, including adding AI-enabled search for clinicians. Passport adoption grew throughout the quarter and recently surpassed 400,000 users, up 33% year-over-year, providing AMN with one of the largest clinician networks in health care staffing. Importantly, monthly active users increased by more than 50% over the prior year. For the third quarter, we estimate Technology and Workforce Solutions revenue to be down 11% to 13% year-over-year. This quarter's financial performance has continued to improve our balance sheet strength. Our capital allocation approach remains focused on creating long-term shareholder value, reflected in this quarter with the 2 targeted acquisitions that enhance our solutions portfolio while also returning capital through modest share repurchases. As the health care workforce services market continues to normalize, we are seeing increasing indications of industry consolidation, and we believe our financial strength and market leadership position us well to be both an active participant and a beneficiary of these trends. We also welcomed 2 important additions to our leadership team with the appointment of a new Chief People Officer and Chief Commercial Officer. These proven leaders will help strengthen our talent strategy, enhance our technology-enabled and people-centered solutions and drive a more integrated go-to-market approach aligned with our long-term growth objectives. Their appointments also underscore AMN Healthcare's position as a premier destination for top talent, reflecting the strength of our platform, culture and growth opportunities, as we continue to attract experienced leaders who can help advance our strategic priorities. Now I'll turn the call to Brian for a deeper look at our second quarter results and third quarter outlook.

Thank you, Cary. I'd like to call out some details to expand on our second quarter financial results published this afternoon. Consolidated second quarter revenue of $673 million grew 2% year-over-year and was 6% above the upper end of our guidance range. The revenue upside came from labor disruption and strong performance in travel nurse, allied and search. Our Q2 guidance had assumed $10 million in labor disruption revenue, while the actual reported revenue came in at $25 million. Reported gross margin was 30.6%, 210 basis points above the top end of guidance. Second quarter net income was $21 million compared with a net loss of $116 million in the prior year period and net income of $62 million in the prior quarter. Adjusted EBITDA was $73 million or 10.9% of revenue. Adjusted EPS was $0.77. Our consolidated results benefited from several items that are not expected to recur in the third quarter, including a true-up of billing accruals from the large Q1 labor disruption event, a reserve reversal from a prior year event and other favorable reserve adjustments. These Q2 items added about $27 million to revenue, 290 basis points to our consolidated gross margin and 370 basis points to our adjusted EBITDA margin. Excluding these items, our Q2 revenue would still be almost 2% above the high end of our guidance range, and our EBITDA margin would be at the top end of our 6.7% to 7.2% guidance. Consolidated SG&A expenses in the quarter were $147 million. Adjusted SG&A, excluding certain items, was $135 million, down 4% compared to the prior year. SG&A included a $5 million unfavorable professional liability actuarial adjustment, partly offset by a $3 million favorable adjustment to the allowance for credit losses. The Nurse and Allied segment reported revenue of $422 million with a 28.4% gross margin and 13.8% segment operating margin. The previously noted labor disruption billing and reserve adjustments contributed 490 basis points to the gross margin and 600 basis points to segment operating margin during the quarter. Turning to our traditional staffing operations, performance was led by our travel nurse and allied business lines. Travel nurse volume grew 6% year-over-year and was 3% better than the high end of guidance. Allied volume was up 7% year-over-year and exceeded our guidance by 1%. International nurse revenue also grew 23% year-over-year. Nurse and allied average bill rate was nearly flat year-over-year, a bit better than we had expected, and average work were up 1% year-over-year. Higher demand and strong capture of that demand drove revenue above expectations. Bookings momentum is a key driver of our third quarter revenue outlook, which calls for double-digit year-over-year growth at the midpoint for the Nurse and Allied segment. The highlight of our Physician and Leadership Solutions segment this quarter was search. Physician search grew new searches by 37% sequentially and 40% year-over-year. Executive search saw new searches increase 30% year-over-year and leadership search volume rose by 60%. Our locum tenens revenue was flat sequentially due in part to a negative sales adjustment that reduced revenue and gross profit by $2 million. Volume increased by just under 1%, which is below our typical seasonal uplift, which we called out on last quarter's call. As Cary noted, we are actively engaged in several initiatives to get this business back to growth. In our Technology and Workforce Solutions segment, while revenue was down 15% year-over-year, it was down 11%, excluding the divestiture of SmartSquare. Language services continues to navigate through the transition to our shared service strategy, which is enabling us to retain more clients. Minutes were up 3% sequentially and flat year-over-year despite the pressures on the limited English proficiency population and nominal contribution from new clients. Price per minute was down 3% sequentially and 8% year-over-year. Revenue in our VMS business was $15 million in the second quarter, and we expect this revenue to stabilize at this level over the second half of the year with prospects for sequential growth in 2027. Days sales outstanding for the quarter was 52 days. Excluding working capital effects from the large labor disruption events in the first quarter, DSO was 54 days, flat sequentially and 2 days lower year-over-year. While our earnings release provides additional balance sheet and cash flow details, I want to highlight that we ended the quarter with $362 million in cash and equivalents. This was above our expectation of $175 million, primarily due to favorable working capital impacts, including a remaining outstanding balance of strike-related client deposits of $117 million at quarter end. Even with Q3 cash flow, including a $20 million interest payment and higher cash tax payments and assuming the remainder of the deposits are repaid this quarter, we would anticipate at least $225 million of cash at quarter end. We ended the second quarter with total debt of $750 million, and our leverage ratio as calculated per our credit agreement was 1.5x. During the second quarter, we repurchased 85,000 shares at an average price of $26.33. Going forward, and assuming no other material capital allocation needs, we anticipate modest share repurchases primarily to offset dilution from equity awards. Moving to the third quarter outlook. We expect consolidated revenue in the range of $640 million to $655 million. Gross margin is expected to be 27% to 27.5%. Reported SG&A is projected to be 22% to 22.5% of revenue. Operating margin is expected to be 0.2% to 0.8% and adjusted EBITDA margin is expected to be 6.5% to 7%. Additional guidance details are provided in the earnings release. Now operator, let's open up the call for questions.

And your first question comes from the line of Jeff Silber from BMO Capital Markets.

Cary, in your prepared remarks, you mentioned how your clients are seeing contingent percentage at historic lows. Can you just kind of quantify that roughly where it is now, and I know there's no such thing as normal, but what should we expect that to normalize at over time?

Yes. Thank you, Jeff. So if you look at -- and I'll go through kind of the cadence of what that's looked like over the past cycle, pre-COVID, you would have seen that premium of contingent to permanent labor be in the mid- to high teens. During COVID, you got up to 100% premium just because of the significant spike in demand. We're now back down into the mid- to high single digits. Some would put that in some markets at actually even lower than that. And so the effect of all that is coming out of COVID, getting back to permanent and reducing contingent spend was part of the workforce cost containment strategy. If you look at where we are today, particularly with both the relatively limited premium and the flexibility it provides, it's actually an important part of how you solve for your workforce strategy.

All right. That's helpful. I guess I was thinking about the penetration rate, so to speak, the percentage of contract labor. Any comments on that, how that's tracking in your clients versus what was maybe pre-COVID?

Yes. We have clients that are in different places. And even within clients, you can have especially their urban locations at much higher levels of utilization. I would say as a general comment, we have seen overall utilization with clients that is at or slightly below where they were pre-COVID.

And your next question comes from the line of A.J. Rice from UBS.

First, just to ask about your margin assumption. Obviously, this quarter, there's a lot of puts and takes, but it sounds like you were 10.9% in aggregate. You're going for a 6.5% to 7% EBITDA margin in the third quarter. It doesn't sound like there's -- you're sort of assuming the margin for the core business was about the same in the third quarter that you saw in the second, or is there any place where you're assuming much of a change sequentially quarter-to-quarter?

Thanks, A.J. This is Brian. I would say there's not any significant changes when you work through some of the items that we called out that impacted the higher margin in the second quarter. When you look at the underpinning of that and look from Q2 to Q3, there aren't any significant changes in the gross margins across the 3 different segments, and our SG&A is running pretty consistently as well. And so when you take that and bring it over, that's where you end up in the range for both the gross margin guidance as well as the adjusted EBITDA. The Technology Workforce Solutions segment is more mix with that business down a bit and that has a higher margin profile. That's why the guide on the gross margin at the midpoint would be a bit below where our second quarter was, again, on a normalized basis, that's probably the one thing I would call out, it's more mix between the segments than it is any material changes within the segment.

And maybe in there somewhere I missed it, but is the guidance on the strike revenue to go back to about $10 million for the third quarter?

Yes. We've embedded in there around $7 million or $8 million of strike-related revenue in the third quarter.

Okay. And then maybe a bigger picture question on the sort of step-up in demand that you're seeing in Nurse and Allied. Is that focused in any particular area, large systems, academic medical centers, community hospitals, MSP, non-MSP? Is there any way you can -- is it across the board, or is there any way to characterize where you're seeing a pickup in strength?

Yes. We're seeing it broad-based. And so both in terms of regions, size of health care providers, and we're also seeing it across service models. So we saw increases in our MSP book. We're seeing increase in vendor-neutral and third-party programs. So the demand acceleration that we're seeing, we've really been in the kind of year-over-year demand increase posture for Allied for most of 2025 and '26. But what we saw in nurse that accelerated in May was broad-based.

You referenced -- just as a last final point on that. You referenced in your comments some market disruption. Do you think what you're seeing is mostly just underlying strength of market, or are you picking up share given some of the disruption that's happening at some of your major competitors?

I think that we are benefiting from 2 things in our business. One is some of the underlying demand acceleration that we believe is happening across the market. And the second part is we are executing very well against that demand. And so we have been talking about this for a couple of years about how we're building a more automated tech-enabled scaled chassis. We're faster. And so it's not just the demand, and we're now playing across the entirety of the market, but we are executing very well on filling that demand.

Yes. [indiscernible] we grew the market overall in the second quarter, which I think is indicative of the -- with our fill rates increasing on vendor neutral, that typically would imply that we're taking some share. And the team has done a great job of delivering high fill rates on our direct and MSPs. And just in terms of overall demand as well, this is something we've talked about, I think, on prior calls with patient utilization still increasing in hospitals, the rate of growth this year has slowed down, but you've still seen several years of increasing patient volumes. And then over the last several quarters, you've seen a slowdown in the permanent hiring. I think if you looked at the total cost of permanent labor has increased significantly over the last 3 or 4 years. And so as hiring has slowed down and you have the attrition occurring, it's not unsurprising that you start to see demand pick up as well.

And your next question comes from the line of Tobey Sommer from Truist Securities.

I'd love to get your perspective, both historically and prospectively when demand increases or orders increase to this degree, my sense is that historically rates follow if the demand increase persists for long enough, not a month or 2, but call it, 6 months. Are you seeing any difference in bill rates in your order book versus your TOA, and do you expect to?

Yes. Let me give you a little bit of perspective of what we see today, and I'll have Brian layer in what we've seen historically through some of these cycles. So we have seen the broad-based demand that we've been talking about. We haven't yet seen bill rate increases from that. And so bill rates have been stable. We are seeing some places where bill rates are increasing with clients who just need to get them filled, but it's not more sustained. But we would expect that when you start seeing higher periods of demand, particularly if winter orders start coming in and you start seeing that more sustained demand, there is a lag effect, but that you would start to see bill rates improve. Brian, what would you...

Yes. I mean, Tobey, we've been through enough cycles together on this that I think you're spot on. That's what we've seen historically. There is a lag. The exact timing, I think, is hard to predict. But if you do have sustained higher demand, it's still a very competitive environment. That's the one thing that's, I think, a little bit different. You have more suppliers in the industry than you've had historically. So that, I think, is also creating more competition to fill orders where maybe that you haven't seen the rates pick up as much yet. But if it sustains for a longer period and grows more, then at some point, that competition from clients would typically drive rate increases. And we welcome that because that will also create the opportunity for us to bring more supply into the industry because obviously, our #1 priority is filling positions for our clients.

Could you -- speaking of supply, could you sustain a decent level of growth just based on increasing TOA at these bill rates, or do you need higher bill rates to generate the supply to sustain meaningful volume growth?

I think it depends on where the demand is coming from. So we have very large pockets of clients, I'd say, particularly in locations and -- that are very attractive that we could continue to supply at these bill rates. I think as you leave this year and get into next year, you would want to start seeing some bill rate increases just because there's going to be a natural labor market increase expectation that is the foundation of any of these rates.

And then one last question for me, if I could. Could you give us an update on the status of the Kaiser renewal, the RFP out in the market? And I understand you probably can't tell us like who's going to win, you're going to retain, et cetera, but maybe give us your view on the prospects, the format of the proposal, if it's still a unified single vendor?

Yes. So our Kaiser contract goes to the end of 2026, and the client is now in the long expected RFP process. And all of this RFP process is part of the normal governance cadence. We expect this RFP process to be competitive. And we also have a very strong, long-standing relationship with Kaiser and very strong program performance. So we feel well positioned.

And your next question comes from the line of Kevin Fischbeck from Bank of America.

Great. I guess maybe just a follow-up on that one. What historically has happened after the RFP reprocurement? Do they normally seek better terms, or is it basically just similar terms that you would expect on a new contract?

I would say, generally speaking, procurement will strive for better terms as just a theme that we see across the board. I think we talked about this a little bit last quarter, but given the breadth and depth of the Kaiser relationship, we have evolved how we support and service them even during the course of this contract. And so we are more market-like than you would have been 4 years ago or 5 years ago. And I give a lot of credit to both parties for that. So I would say from what we see overall in RFP processes, we're not seeing anything different about how you continue to try to negotiate terms or what people are looking for.

Okay. And then is there a way to size the 2 deals that you did in technology workforce revenue EBITDA contribution annually?

The 2 acquisitions?

Yes.

So the acquisitions that we did, one is in TWS and the language services support -- language services solutions segment, that's Jaide. The other one, the ESSENTIAL Leadership is supportive of our search and advisory capabilities. Between the 2 acquisitions, we spent $3 million on those 2 deals. And think of them as extending our capabilities, and we're already seeing strong support for those capabilities. We have 3 verbals with Jaide and ESSENTIAL leadership assessment is a solution we used in the past that we now own, and we're seeing interest in that as well.

Okay. And then it wasn't clear to me if this was a change in the wording, but it sounded to me like a change in the wording. You've been talking about consolidation in the space for a while, and this time, you added not only that you were going to be a beneficiary of these trends, but maybe that you are also going to be an active participant. Is that a change? Are you now looking at deals more aggressively, or is that kind of always the way you thought about it?

Yes. I don't think there's a major change in the way we thought about it. I think we're -- what changed in the last year is that as we continue to strengthen our balance sheet and reduce our leverage, it's created more opportunity for us to kind of widen our capital allocation aperture. We were heads down really focused over the last couple of years on delevering our balance sheet. And now we -- as we've got our leverage level down 1.5x at the end of the quarter and have got some cash on the balance sheet, and I think with more stability that we've seen in the market, it puts us in a position to be more active in looking at opportunities. We're always keeping an eye on things coming to market, but we're also better positioned now if we want to be -- you can imagine we've got a pretty strong filter of anything that we would want to consider bringing in. We're very fortunate that we've got the broadest set of solutions in the market today. But we're in a position now that if the right opportunity comes along, we think it would be accretive, then we can participate more actively than we might have been able to 12 or 24 months ago. And I think the market, as we talked about over the last year, there's been an expectation that there'd be more consolidation that would occur. Quite honestly, most of last year, it was relatively quiet. There were a few transactions in certain categories, but not as many as we expected. That's changed over the last couple of quarters now. We're starting to see more assets come to market. And so that's partly why we said it, but it's a combination of more opportunities, but also us being in a position now to be more of an active participant.

And Kevin, the other piece I'd add to Brian's comments is when we see competitors who are going through some evolutions or changes, it's also an opportunity for us. And we are really much more proactive around going after market opportunities when those present themselves.

And your next question comes from the line of Mark Marcon from Baird.

Wondering about the overall environment just as it relates to travel nursing, and you mentioned that demand has picked up, Cary. Is there a way of quantifying it just in terms of like number of hospitals served or systems served? Are you expanding the overall aperture of the number of hospitals, or are you just getting deeper in the ones that you've already -- that you've been serving for a while, but just seeing a pickup in demand there?

Yes, it's a little bit of both, Mark. And so from a current client standpoint, we are seeing some utilization increase with them. And some of it is just for same -- what I'll call kind of same hospital needs, but we're also seeing some of our clients expand. And so we're getting the beneficiary of some of that expansion. And then I'd say the second part of what we've seen from demand growth is we are much more competitive in filling in third-party channels. It's all the [ few ] things that we've been talking about for some period of time. And so that becomes a bit of a flywheel that when you start filling more, they come to you. So we are serving more health care systems through those channels. So we are serving more, and it really is just a function of the fact that we have a much broader aperture of channels and programs that we're supporting, whether directly or through third parties.

Great. And you mentioned earlier that perm hiring at the hospitals has slowed down. There's lots of potential reasons for that, but what do you think the top 3 reasons for that is?

I'd say the top 3 reasons are that they got back to a very good base of permanent hires, and that was a function of 2 things. One is the actual hiring itself, which we know is very high by historical standards coming out of COVID. The second part is you saw retention rates normalize post-COVID as well. So it's not just that you're hiring more, but you're not losing as many clinicians in the back door. And then the other piece that we are seeing is the cost normalization and frankly, even historical attractiveness of using contingent as a completion strategy and giving you more flexibility. A lot of -- I've been with a number of clients over the past 3 weeks, and one of the things that they continue to look for is not just a cost-effective strategy, but increasing flexibility about how they achieve that.

Great. And then Cary, are you noticing or are the folks in the field noticing any difference with regards to any sort of demographic profiles with regards to the types of people that you're actually placing? And I'm talking about clinicians and nurse travel roles.

I don't know that we've seen any demographic change in the nurses that we're placing. I'll give you one stat and one kind of commentary on what we're seeing in terms of the broader nurse population. So the one stat is you saw in some of the latest labor reports that retirements ticked back up again. And so we kind of started out maybe 1.5%. You're up to a little bit over 2%. We were expecting that. So I would expect that trend to continue as part of the kind of aging demographic. And related to that, one of the things that what I hear from a number of our clients is really how do I significantly scale up the aperture of clinical experience for some of my younger staff. And so that is something that is very interesting to them because it's not just that you're losing a one-for-one in a retirement, but you're losing the experience that goes with it.

Yes. I'm hearing some of the same things. And then with regards to PLD, I mean, when you think about that, how -- what do you think it would take for some of the trends to turn around and to become a little bit more positive there?

Yes. So let me kind of take it in 2 parts. So locum, very consistent themes to what we talked about last quarter. And so we have seen year-over-year demand increase. Most of that came in the first half of this year. We had some really nice client wins. And so we're seeing the demand that's there. We are not as fast on filling, particularly when a very large part of that market and the demand increase is coming in the third-party channels. So it's a similar experience that we had in Nurse and Allied. And so we're doing the same transformation that we did in Nurse and Allied very successfully in our locums business. So we would expect those efforts, you would start seeing the full benefits of that as we get into 2027 and that we would return to year-over-year growth in 2027 in Locum. If we look at the Search and leadership businesses, we talked a bit already about the positive second quarter year-over-year performance in Search. We would expect for the remainder of this year and into 2027 for that to have year-over-year double-digit growth. There's going to be some seasonality in that. At the end of the year, you typically have a little bit of quarter-to-quarter kind of sequential softening, but we would expect from a year-over-year standpoint for that business to be in low double digits and then for interim to get back to growth in 2027.

And your next question comes from the line of Trevor Romeo from William Blair.

Just maybe a couple left for me at this point. So one maybe on the international nursing business. I think you talked about 23% growth in the quarter. You also mentioned the Embassy appointments maybe not keeping pace with the Visa dates. So maybe you could talk through those dynamics a bit. And are your expectations for growth kind of still the same? I think last quarter, it was high teens for 2026 and maybe low double digits for 2027.

Yes. Thanks, Trevor. Yes, the high teens for this year, yes, a lot of the placements that are impacting '26 now have been made. And so really, as we're looking to 2027, we've seen really good progress on the visa dates moving forward, actually more than we had anticipated. But we've seen some of the travel bans that existed. And more recently, in the last few months, we've definitely seen a slowdown. I probably want to call it out on the visa interviews. And so that is starting to impact some of the volume expectations for 2027. So we -- at this point, we still expect to see growth in 2027 over '26, but that amount of growth is probably a bit lower than we would have expected. There's ample demand, and we have a very large supply of nurses that still want to come here. And there are -- there's discussion about improving the appointments, and that may open up a bit as the next fiscal year starts for the government. But we'll have more line of sight as we get into the next quarter call on what that looks like and how it would impact '27. So again, sitting here today, we'd expect growth, but it may be more in the single-digit range from what we can see now, but there's still adequate time for that to improve, if we start to see things open up a bit more as well.

Okay, Brian. That's helpful. And then maybe just on the language services business, if you could give a little bit more update on the competitive dynamics there. It sounds like you're kind of expecting lower pricing on renewals coming up. But maybe just how many quarters are we from being fully normalized on that front? And what's your confidence that language services can be both a volume and a revenue growth market kind of beyond this normalization period?

Yes. What we're seeing competitively is very similar to what we've seen over the past couple of quarters. So it is a very competitive environment, and that's just flat out competition, but also that competition going after more limited demand because of some of the immigration policies. And so what we have been seeing and especially this last quarter, we had flat minutes growth and you saw about 8% pricing compression. We would expect that trend to continue for the rest of this year. If we think about next year, we would expect the compression that we see in minutes pricing to be more muted in '27. We've worked through a number of our client renewals, new clients coming on. And so as we turn to 2027, we would expect with some new client wins with the rollout of our new tiered service strategy help offset some of that compression. And then the second part of it that we've talked about the past 2 quarters is as part of our new service tiered strategy, we have a more global workforce that we have been putting into place. The first part of that was the end of last year into the first quarter. The second part will be the end of this year. That will also be helpful from a gross margin standpoint for this business in '27.

And our next question comes from the line of Jack Slevin from Jefferies.

Maybe just to expand a little bit on that point on language. I guess all the numbers are very clear, and I appreciate all the color on that. Maybe just taking a bit of a step back and looking at some of the competitive actions that have taken place in the market, do you feel like the shift you've made here and the addition of Jaide sort of position you well moving forward for the next couple of years to sort of push past some of these issues and get to a more stable point, both from a revenue and margin perspective? I understand it's a pretty dynamic market, but I'd just be curious to hear about sort of what you're thinking from a product positioning standpoint.

I think there's 2 important things that we've done from a positioning standpoint. The first is this shared service model. And so what that really does is it enables us to be well positioned across the entirety of the market. And so we now have a solution set for clients that are going to try to optimize just on the cost per minute. And we have a very well-proven solution set for clients who are going to optimize for total clinical cost delivery of the model. And we are good in both of those. That has been very important. What Jaide does for us is clients are increasingly interested in a more consistent patient experience from the moment they come in until the moment that they leave. And so we are a leader in the clinical interaction space. Jaide now enables us to be a leader in before the clinical interaction and after the clinical interaction. And so it's important both in terms of the patient experience that is important to clients, but it's also important because it helps them save money. So there are some very strong results that they've seen early days, taking discharge down from 2 hours to 15 minutes that become part of an important cost savings trajectory for clients as well.

Okay. Very, very helpful. And then another one to double-click on a little bit. I appreciate some of the comments and I think responding to Tobey's question. But I guess on the overall demand environment, I guess I just wanted maybe to frame it a little bit differently than have been asked previously. In 2024, we saw a pretty similar trend, fairly similar time frame where we saw a big spike in demand with sort of low rate on it. Can you maybe just double-click a little more on what you're seeing now that might give you confidence that this is less of an air pocket and more something that's going to sustainably drive some amount of volume as we roll into the back half of this year?

In terms of overall demand?

In terms of -- I'm thinking more Nurse and Allied, but yes, in overall demand.

I think if you look at where we started to see the acceleration inflection, it was in May. We've seen that accelerate as we have gone through the second quarter and even as we speak today. And so we need to see a couple more quarters of this continued demand pattern. But you're also going into a period where you typically get winter orders. And while we're just in the beginning stages of that, the indications our clients are giving us is that they'll look relatively similar to what we saw last year. And so I think where we are from a timing standpoint in that cycle, that would be typically a positive tailwind to seeing demand increase throughout the next couple of quarters. And we want to see 3, 4-plus consecutive quarters of that.

The other thing I think it's notable is that just the sheer number of orders isn't the only important factor, it's the quality of those orders and what rates are at. So when we talk about our average rate, that's on the placements that we're making. If there's a high percentage of orders that are well below that, they just sit there and they typically feel unfilled. So I think what we're seeing is a client that they have a more urgent need, they're stepping up with rates. We have more orders with rates that are attractive enough for us to be able to place into. And that's why you're seeing our fill rates improve and the volume pick up as well. So I think that's something that's different where more clients were testing the market 2 years ago with really low rates and they just could not be filled. We have a higher percentage now that have, and even though the overall average rate has not really increased, the number of orders that we can fill at that rate have.

That ends our question-and-answer session, I will now hand the call back to Cary Grace for final comments.

Thank you for your interest in AMN Healthcare, and a huge thank you to the AMN team members and clinicians who ensure strong quality care every day in our health care system. We look forward to giving you updates next quarter.

This concludes today's call. Thank you for participating. You may all disconnect.