Cross Country Healthcare (CCRN) Earnings Call Transcript

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DATE

Wednesday, March 4, 2026, at 5 p.m. ET

CALL PARTICIPANTS

• Chairman & Chief Executive Officer — Kevin Clark
• Chief Financial Officer — Bill Burns
• Group President of Delivery — Marc Krug
• Chief Solutions and Operations Officer — Amy Hawkins
• Vice President of Investor Relations and Corporate Communications — Joshua Vogel

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RISKS

• Bill Burns stated, "The decline in margin across the year was driven primarily by declines in revenue and continued bill-pay spread compression, most notably in travel, partly offset by the cost savings I mentioned a moment ago."
• Management acknowledged, "we do not anticipate margin pressure easing for the travel business in the near term," specifically citing a tight bill-pay spread due to competition.
• The terminated merger led to $78 million in noncash impairment charges principally related to goodwill and trade name abandonments.
• SG&A for the quarter and year included nonrecurring severance related to the CEO change.
• Education staffing saw a 7% year-over-year decline in revenue, attributed to clients insourcing positions, impacting segment growth.

TAKEAWAYS

• Consolidated revenue -- $237 million in the quarter, declining 5% sequentially and 24% year over year; full-year revenue reached $1.05 billion, down 22%.
• Gross profit and margin -- $48 million gross profit and a 20.3% gross margin, down 10 basis points sequentially but up 30 basis points year over year; annual gross margin remained stable in the 20.0%-20.4% range.
• Selling, general, and administrative expense (SG&A) -- $51 million for the quarter (up 9% sequentially, down 8% year over year), including nonrecurring severance; excluding those, SG&A was $43 million, down 19% year over year, with annual SG&A down 16% after adjustments.
• Headcount -- U.S. headcount declined by 21% during the year, driven by cost reduction initiatives and increased reliance on the India center of excellence.
• Adjusted EBITDA -- $4 million for the quarter (1.7% of revenue); $27 million annually (2.5% of revenue), with margin compression attributed to lower revenue and tighter bill-pay spreads.
• Impairment charges -- $78 million noncash charges mainly related to goodwill and trade name write-offs, linked to the share price decline after the terminated merger.
• Merger termination payment -- Net credit of $16 million for the quarter and $3 million for the year from a $20 million payment.
• Cash position -- $109 million in cash and no outstanding debt at quarter-end; more than $100 million in cash available entering 2026.
• Share repurchases -- Over 800,000 shares (2.5% of shares outstanding) repurchased in December for $6.8 million; an additional 486,000 shares repurchased so far in 2026.
• Cash flow from operations -- $18 million generated in the quarter and $48 million for the year, inclusive of merger-related items offset by the termination payment.
• DSO (days sales outstanding) -- 58 days in the quarter, aligning with the company’s 60-day target.
• Technology initiatives -- IntelliFi platform supports all MSP and vendor-neutral programs and is expanding into home-based and education staffing in 2026; licensing to other staffing companies underway.
• Business segment revenue (Q4) -- Nurse and Allied: $194 million (down 4% sequentially, down 24% year over year); Physician Staffing: $43 million (down 12% sequentially, down 20% year over year).
• Travel nurse and allied revenue -- Down 9% sequentially and 30% year over year, attributed to declines in travelers on assignment with stable average bill rates.
• Per diem revenue -- $19 million, declining 8% sequentially, with this business line annualizing at roughly $80 million and operating at a gross margin above the travel segment.
• Education staffing -- $18 million revenue (up 48% sequentially, down 7% year over year) as clients insourced roles; annual revenue $71 million with about 28% gross margin.
• Home-based staffing -- $34 million in revenue, up 34% year over year, and annualizing above $140 million; cited as a line of high growth potential.
• Physician staffing details -- Revenue per day filled rose 10% year over year due to mix and higher bill rates, despite declines in billable days in core specialties.
• First quarter 2026 guidance -- Revenue expected between $235 million and $240 million; adjusted EBITDA of $4 million to $5 million; EBITDA margin near 2%; gross margin forecast at 19.5%-20%.
• Labor disruption (strike) revenue -- First quarter includes “single millions” in revenue from labor disruption events, described as immaterial and excluded from travel metrics.
• Capital allocation -- Strong preference for tuck-in acquisitions, especially in home-based and locum tenens, and continuing share repurchases; not pursuing supply partner acquisitions.
• Operational priorities -- Renewed focus on growing market share in large health systems, expanding new client “logos,” and accelerating technology deployment and automation, particularly AI-driven processes.
• 2026 targets -- Management goal to exit 2026 above $1 billion revenue run rate and at 4%-5% adjusted EBITDA margin, with sequential improvement and year-over-year growth targeted by Q3 or Q4.
• Cost savings deployment -- Redeployed headcount reductions and operational efficiencies are being reinvested in new revenue producers (recruiters, account managers, sales professionals) at the start of 2026.

SUMMARY

Management at Cross Country Healthcare (NASDAQ:CCRN) reported a material year-over-year revenue decrease and tightening margins, with fourth-quarter impairment charges largely resulting from the aborted merger. Strategic focus has shifted to technology-driven transformation, including the expansion of IntelliFi and increased AI automation. Bill Burns guided for sequential revenue and profit improvement throughout 2026, with year-over-year growth targeted as soon as the third quarter. The company ended the quarter with substantial liquidity, zero debt, and continued share repurchases, supporting disciplined capital allocation toward technology, accretive acquisitions, and additional shareholder returns.

• The U.S. center of excellence in India now employs between 700 and 800 people, supporting business process shifts and providing significant operating leverage.
• Average bill rates for travel nurses stabilized at $90-$95, while order volume from MSP and direct clients increased from the fourth to the first quarter.
• Leadership cited rising numbers of travelers on assignment in the first quarter and projected further growth into the second quarter, despite normal seasonal pressures abating.
• IntelliFi has been licensed to other staffing firms and will formally expand into home-based and education staffing markets during 2026.
• Bill Burns said, "We had some labor disruption revenue in the first quarter. It will be in the single millions. That is why Kevin is saying it is not really overall material. And it is not included in those travel metrics we are talking about with the travelers on assignment that are ramping continuously throughout the first quarter into the second quarter."
• Share repurchases continued under the 10b5-1 plan, with the company expressing that its stock price does not reflect the underlying value of the business.
• A declining U.S. headcount and further offshoring and automation are expected to yield additional cost savings and operating leverage throughout 2026.
• Education staffing is expected to return to growth later in 2026 following the impact of client insourcing noted in the prior year.
• Cross Country Healthcare does not currently operate an international nurse recruitment pipeline but sees this as a potential future growth area.

INDUSTRY GLOSSARY

• MSP (Managed Service Provider): A service model in healthcare staffing where a single vendor manages all aspects of contingent labor sourcing and administration for a client health system.
• VMS (Vendor Management System): Software for managing and procuring contingent labor and workforce solutions, often facilitating engagement of multiple staffing suppliers in a single platform.
• Locum tenens: Temporary physician and advanced practitioner staffing to cover short-term needs at healthcare facilities.

Full Conference Call Transcript

Joshua Vogel: Thank you, and good afternoon, everyone. I am joined today by our Chairman of the Board and Chief Executive Officer, Kevin Clark, as well as Bill Burns, our Chief Financial Officer, Marc Krug, Group President of Delivery, and Amy Hawkins, Chief Solutions and Operations Officer. Today's call will include a discussion of our financial results for 2025, as well as our outlook for 2026. A copy of our earnings press release is available on our website at crosscountry.com. Please note that certain statements made on this call may constitute forward-looking statements. These statements reflect the company's beliefs based upon information currently available to it.

As noted in our press release, forward-looking statements can vary materially from actual results and are subject to known and unknown risks, uncertainties, and other factors, including those contained in the company's 2024 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, as well as in other filings with the SEC. The company does not intend to update guidance or any of its forward-looking statements prior to the next earnings release. Additionally, we reference non-GAAP financial measures such as adjusted EBITDA or adjusted earnings per share. Such non-GAAP financial measures are provided as additional information and should not be considered substitutes for or superior to those calculated in accordance with U.S. GAAP.

More information related to these non-GAAP financial measures is contained in our press release. With that, I will now turn the call over to our Chief Executive Officer, Kevin Clark. Good afternoon, and thank you for joining us.

Kevin Clark: As you know, 2025 was a challenging year for Cross Country Healthcare, Inc. The pending merger introduced uncertainty for our employees and our customers, which weighed on our growth during the year. With that process now behind us, we have improved momentum and a renewed focus across the organization. However, what did not change was the strength of our client relationships, the quality of our clinicians, or the financial strength of our balance sheet. I stepped back into the CEO role with a clear objective: restore momentum, sharpen execution, and position the company to grow faster than the market again.

As reflected in the recent Becker's article on Cross Country Healthcare, Inc., we are advancing a strategy built on operational rigor, technology-powered workforce solutions, and disciplined capital allocation to drive long-term shareholder value.

We enter 2026 with no debt and a significant amount of cash, providing us the flexibility to invest in growth initiatives that generate durable returns. Our priorities are straightforward. Simply put, we must expand our market share within large health systems, capture new logos across our divisions, improve operational efficiency and speed to fill, and leverage technology as a differentiator. I am confident that this will be a year of execution and acceleration. The opportunity in front of us is meaningful, and with disciplined execution and renewed commercial focus, we expect to return to revenue and earnings growth by 2026.

Now turning to our business performance, I will start with discussing the markets we serve and the actions we are taking to achieve growth in 2026 and beyond. Looking at the healthcare staffing market and travel in particular, we believe that the industry has stabilized and is poised for growth in 2026. With stability in both demand and in bill rates, clients are increasingly focused on the speed to fill rather than reducing contingent labor, signaling a shift to a more normal operating environment. This is evident in our weekly production since the start of the year, which has outpaced the fourth quarter.

For the first time in more than three years, we are anticipating travel to be flat to up slightly on a sequential basis, with projected travelers on assignment growing each month into the second quarter.

Contributing to the improved production is our growing book of business, as highlighted in our third quarter 2025 earnings release. We successfully renewed, expanded, and won more than $400,000,000 in contract value, predominantly with our MSP clients. Given our robust pipeline of sales activity across multiple business lines, we are well positioned to expand our portfolio and secure new clients in 2026.

Shifting to gross margin, we expect travel will continue to experience a tight bill-pay spread as competitors jockey for market share. As a leader in this space, Cross Country Healthcare, Inc. will remain competitive to protect and grow clinicians on assignment. Although we do not anticipate margin pressure easing for the travel business in the near term, we will seek to maintain and expand our consolidated gross margins through growth in our higher-margin businesses, which had aggregate annual revenues over $350,000,000 last year.

We see a path for growth across all our lines of business through our growing proprietary technology portfolio anchored by IntelliFi, our market-leading workforce intelligence platform that supports virtually all of our MSP and vendor-neutral programs. Through this technology, we have delivered predictive visibility, optimized clinician deployment, and improved labor cost management for health systems. At its core, IntelliFi is a highly scalable VMS capable of managing all staffing categories including physicians, per diem, and internal resource pools or travel programs. And we are seeing growing interest from other staffing organizations seeking to leverage the platform within their own offerings.

In 2026, we plan to expand IntelliFi into the home-based and education staffing markets, extending its reach into adjacent sectors that demand scalable work solutions. Our software portfolio also includes Experience, an established mobile platform actively used by healthcare professionals to discover opportunities and manage their careers digitally, strengthening engagement and retention across our talent network.

Our staffing business remains a strong foundation, but our long-term growth strategy is increasingly powered by our proprietary technology portfolio, enhancing client value, improving efficiency, expanding margins, and creating scalable recurring revenue streams. These solutions represent the continued evolution of our broader technology roadmap. Our objective is not to move away from staffing, but to transform how workforce solutions are delivered. Our other technology priorities involve automation across the enterprise through AI and other means, such as the rollout of the middle-office functionality within our ERP. Unleashing the power of AI will improve speed to market and boost recruiter productivity while the completion of the ERP project will improve our efficiency and back-office operations.

It is clear that technology is central to how we will grow and deliver better outcomes while improving efficiency and productivity. But it is not the only lever we are pulling to drive top-line growth. Since the start of the year, we have made conscious and purposeful investments in revenue producers across the organization, primarily funded by redeploying cost savings we were able to identify and act quickly upon. In the first quarter, we have added several dozen revenue producers, including recruiters, account managers, and sales professionals, and we are already seeing positive results from these investments.

Looking ahead, I believe we will see sequential progression across 2026 with both top-line growth and improved profitability. Bill will cover the first quarter guidance, but our goal is to exit 2026 with a revenue run rate north of $1,000,000,000 and an adjusted EBITDA margin of 4% to 5% and on a path to higher margins for 2027. With a strong balance sheet and more than $100,000,000 in cash on hand, we are well positioned to accomplish our goals. We will be diligent and purposeful in deploying capital with an eye towards a mix of complementary acquisitions and returning capital to shareholders through continued share repurchases.

One of the biggest strengths for Cross Country Healthcare, Inc. is our high-performing, highly engaged team, both here in the U.S. and in our center of excellence in India. I have had the pleasure of seeing a lot of familiar faces as well as meeting new ones over the past three months, and I can tell you that I am truly excited by their focus, energy, teamwork, and execution. I want to take this moment to thank all of our employees for your hard work and steadfast commitment to making Cross Country Healthcare, Inc. the best in the industry.

I also want to thank all of our healthcare professionals for your continued dedication and contributions, as well as our shareholders for believing in the company. In closing, I am excited to be back, and I am equally excited about what lies ahead for Cross Country Healthcare, Inc. With that, let me turn the call over to Bill.

Bill Burns: Thanks, Kevin, and good afternoon, everyone. It is great to be speaking with you all again and to share some insights on our results, as well as the business. Since we have not held quarterly earnings calls throughout the past year due to the merger, I will spend a bit of time focusing on the full year in addition to the most recent quarter.

As noted in today's press release, consolidated revenue for the fourth quarter was $237,000,000, down 5% sequentially and 24% over the prior year, while full-year revenue was $1,050,000,000, down 22% from the prior year. The majority of the decline for both the quarter and the year stems from the prolonged period of normalizing contingent utilization by clients across our core Nurse and Allied businesses, most notably Travel Nurse and Allied. We are pleased to see a slow turning in those businesses as we enter 2026, pointing to a return to a more normal cycle for contingent labor.

Gross profit for the quarter was $48,000,000, which represented a gross margin of 20.3%. Gross margin was down 10 basis points sequentially, but up 30 basis points over the prior year. Throughout the year, gross margin was relatively stable, ranging between 20.0% and 20.4%, the majority of the fluctuations stemming from mix shifts across the portfolio, which partially muted the continued margin pressure within travel.

Moving down the income statement, selling, general, and administrative expense was $51,000,000 for the quarter, up 9% sequentially and down 8% over the prior year. Full-year SG&A was $200,000,000 compared with $233,000,000 the prior year, down 14%. SG&A for the quarter and the year included nonrecurring severance costs related to the recent CEO change. Excluding those costs, SG&A would have been $43,000,000 for the quarter and $186,000,000 for the full year, representing declines of 19% and 16% over the respective prior-year periods. The majority of the reduction in SG&A comes from reductions in U.S. headcount, which was down 21% from the start of the year.

We continue to tightly manage our costs as well as leverage technology and our center of excellence in India to reduce our overall cost of labor. Coming into 2026, we further reduced headcount in the United States, and we anticipate we will identify further cost savings as we progress through the year. As Kevin highlighted in his comments, we are redeploying some of those cost savings in investments in revenue producers, which we anticipate will fuel organic growth throughout the year.

Adjusted EBITDA was $4,000,000 for the quarter and $27,000,000 for the full year, which as a percent of revenue was 1.7% for the quarter and 2.5% for the full year. The decline in margin across the year was driven primarily by declines in revenue and continued bill-pay spread compression, most notably in travel, partly offset by the cost savings I mentioned a moment ago.

Below adjusted EBITDA, there are a number of items to call out. First, with the recent decline in share price following the termination of the merger agreement, the company recorded noncash impairment charges of $78,000,000, principally related to the indefinite-lived assets such as goodwill, as well as the abandonment of certain trade names. Acquisition and integration charges were a net credit of $16,000,000 for the quarter and $3,000,000 for the full year due to the receipt of the $20,000,000 merger termination payment. We also recognized net interest income of $300,000 for the quarter and $1,000,000 for the full year as we maintained a substantial cash position and had no debt outstanding aside from letters of credit.

As we progress through the year, we will be exploring the renewal and rightsizing of our credit facility in an effort to bring down the carrying costs for the unused facility. And finally, on the income statement, we realized an income tax expense of $12,000,000 in the quarter and $11,000,000 for the full year. The significant impairment charge noted a moment ago triggered the recognition of a valuation allowance on our deferred tax assets. However, the company fully expects to utilize all of its NOLs as profitability improves.

Turning to the segments, Nurse and Allied reported revenue for the quarter of $194,000,000, down 4% sequentially and 24% from the prior year. Travel, our largest business within Nurse and Allied, was down 9% sequentially and 30% from the prior year, entirely driven by a decline in travelers on assignment, as average bill rates remain stable. As Kevin highlighted, we are optimistic that the travel staffing market appears to be reaching an inflection point. We are seeing the average number of travelers on assignment holding steady in the first quarter, and we project that to rise into the second quarter, despite seasonal winter needs subsiding at the end of the first quarter.

Our local or per diem business closed the year with $19,000,000 in revenue, which was down 8% sequentially, a slightly faster decline relative to travel. We continue to believe this roughly $80,000,000 business plays an important part in meeting client needs for urgent needs of clinicians at the shift level and continues to operate with a gross margin close to our consolidated average, which remains several hundred basis points higher than our travel business.

Also within Nurse and Allied, our education staffing business reported revenue of $18,000,000, up 48% sequentially as schools returned from the summer recess. We saw this business decline approximately 7% on a year-over-year basis, largely driven by the insourcing of roles at several of our larger clients. For the full year, education revenue was $71,000,000, with a gross margin of approximately 28%, and we believe this business will return to growth in 2026.

Finally, our home-based staffing business once again experienced strong organic growth with revenue of $34,000,000 in the fourth quarter, up 34% over the prior year. We anticipate the growth trajectory for this business will continue, especially with an aging U.S. population, with strong evidence remaining that care in the home drives better outcomes at a lower cost.

Looking at our only other segment, Physician Staffing reported $43,000,000 in revenue, which was down 20% from the prior year and 12% sequentially, principally due to a decline in billable days across several of our top specialties such as hospitalists, anesthesia, and CRNAs. Revenue per day filled was up 10% year over year, driven by modest increases in bill rates as well as favorable mix.

Turning to the balance sheet, we ended the fourth quarter with $109,000,000 cash and no outstanding debt. With the health of our balance sheet, we remain well positioned to make strategic investments as well as execute on our capital allocation strategy. In December, we repurchased more than 800,000 shares of our common stock, or 2.5% of the shares outstanding, at an aggregate price of $6,800,000. In 2026, we continued to repurchase shares under our 10b5-1 trading plan and, as of today, have bought an additional 486,000 shares. Given we believe that our stock does not reflect the underlying value of our business, we anticipate making further share repurchases throughout the balance of the year.

From a cash flow perspective, we generated $18,000,000 in cash from operations during the quarter and $48,000,000 for the full year. Included in these amounts were the costs relating to the merger transaction incurred throughout the year and the subsequent termination payment, which essentially offset those costs incurred on a year-to-date basis. Our DSO in the fourth quarter was 58 days, in line with our stated goal of 60 days. Cash used in investing activities was $2,000,000, primarily reflecting capitalized technology investments related to ongoing projects such as the continued expansion of features and functionality for IntelliFi, as well as our candidate-facing platform, Experience.

Cash used in financing activities was reflective of the share repurchase I noted a moment ago, as well as the final payments of contingent consideration related to the Mint and Motus acquisitions completed in 2022.

This brings me to our outlook for the first quarter. We are guiding to revenue of between $235,000,000 and $240,000,000. The sequential increase is being driven by organic revenue growth in number of travelers on assignment, as well as a small amount of labor disruption revenue. We are extremely encouraged to see the number of travelers rising throughout the first quarter and anticipate to exit the quarter 2% higher than the fourth quarter average. We are guiding to an adjusted EBITDA range of between $4,000,000 and $5,000,000, representing an adjusted EBITDA margin of approximately 2%. As a reminder, we expect payroll tax to negatively impact the first quarter by approximately $2,000,000.

Adjusted earnings per share is expected to be a loss of between $0.04 and $0.06, based on an average share count of approximately 31,500,000 shares. Also assumed in this guidance is a gross margin of 19.5% to 20%, net interest income of $300,000, depreciation and amortization of $4,000,000, stock-based compensation of $1,300,000, and a tax provision of approximately $400,000. Though we only guide one quarter out, we anticipate that both revenue and profit will improve throughout the year as we aggressively pursue organic revenue growth across all lines of business, as well as continue our cost containment efforts and realize efficiencies through technology and further leverage of our operations in India.

Given the investments and improving market conditions, we are looking to exit the year with fourth quarter revenue above $250,000,000 and an adjusted EBITDA margin of between 4%–5%. And that concludes our prepared remarks, and we would now like to open the lines for questions. Operator?

Operator: Thank you. At this time, if you would like to ask a question, you may press 1. To withdraw your question, you may press 2. One moment, please, for the first question. Trevor Romeo with William Blair. Your line is open, sir.

Trevor Romeo: Good evening. Thank you very much for taking the questions. And Kevin, welcome back. Just wanted to maybe start by following up on your comment about exiting 2026 at those run rates above $1,000,000,000 in revenue and 4% to 5% EBITDA margin. What is your confidence in achieving that goal? And then, particularly on the margin side, that is quite a bit higher than where you are exiting 2025. What needs to happen or what levers do you need to pull to get up to those margin levels at the end of the year?

Kevin Clark: Thanks, Trevor. It is great to be back. We have a high level of confidence in what we just described in our comments. We have a large pipeline coming out of last year from the sales side, MSP and VMS. We have what we think is market-leading technology with IntelliFi. We have a whole-house strategy of bringing IntelliFi across all of our divisions for our customers. We have a terrific balance sheet. As you know, we have cash on hand to invest in the business. We have recently ramped up our revenue producers, and they are driving great results. We are going to see quarter-over-quarter growth with our core business.

In our second largest business, we also are very optimistic in the second quarter with our Locums business as well. Things are going to come together really great. We think the market has stabilized, and we think we are extremely well positioned. I will also point out that we are excited to celebrate this month our 40th year being in business. For 40 years, Cross Country Healthcare, Inc. has led this industry with clinical excellence. We are the trusted brand in the marketplace. So when I put all those things together, I personally have never been more excited about the market conditions and our own ability to excel.

And you take a look at our balance sheet and our positive cash flow, and I think we are poised for a lot of growth this year. Bill, you might want to cover from the margin perspective a few more comments. Of course. Hi, Trevor.

Bill Burns: Look, as Kevin said in his comments, we have made a lot of investment to start out the year. We took out several million dollars in cost and redeployed that in revenue producers. Those investments, we are already starting to see return on that investment. So that is part of the growth story sequentially, an improving market backdrop in travel. Our home care business continues to do very, very well. Education is doing well as well. So you look at that trajectory on the top line. From a margin perspective, we are not sitting today looking at a very big gross margin expansion, especially from the pay-bill side.

We are still in a very hypercompetitive market when it comes to that. But there will be some margin appreciation, notably as the businesses with the margins that are above the consolidated average—our home care, our physician business, and our education business—continue to produce a better mix, so the margins will lift up on the gross margin side. But in truth, the opportunity to get to the 4% to 5% that Kevin called out is really about operating leverage. Besides the fact that we are going to get return on the investments, we have plans to continue to look at offshoring more work to our center of excellence in India.

We have identified actions around automation of activities of the things that we are doing, and candidly, we are not leaving any stone unturned. From the standpoint of how we envision exiting the year north of $250,000,000 and that 4% to 5% seems very doable.

Trevor Romeo: Great. Thank you both. That was going to be my follow-up on gross margin versus SG&A. I appreciate that too. And then maybe just shifting over to your balance sheet and capital allocation. Having no debt, I think, in this industry seems like a pretty big advantage right now. Maybe specifically thinking about M&A, what kind of opportunities and pipeline do you see out there? I think we have heard from a lot of people in the industry that travel would benefit from consolidation. Are you still maybe more focused on expanding the nontravel businesses, or would you be more interested in consolidating travel at this point, or how are you thinking about the acquisition strategy going forward?

Kevin Clark: Great question. It is a disciplined capital allocation strategy. We are being patient. I will say coming back into the seat and with the termination of the merger, literally, the phone has rung off the hook for the last three months. So we have had a lot of interesting discussions and meetings and so forth. We know that our future path is all through our footprint of customers. So as we look at strategic allocation of our capital, we look at acquisitions. We are not looking at more supply partners or third-party suppliers, but our ability to invest in our technology platform, to grow our footprint of clients and our customers, that is an area that we are excited about.

We are also very excited about our home-based staffing division. We think we have had a lot of growth there. We think we will continue to see a lot of growth. We are looking for accretive tuck-in acquisitions in a division like that. We certainly like the Locums area quite a bit. It is being patient. It is looking at the marketplace. To the point that you made earlier, some of our competitors are over their skis somewhat in terms of their balance sheet. We think it is an excellent time for us to be in the market with a strong balance sheet, and we will look to consolidate where we can.

Operator: Thank you. Our next caller is Constantine Davides from Citizens. Your line is open.

Constantine Davides: Thanks. I wanted to maybe touch on technology a little bit. In the release, you put in a lot of metrics around IntelliFi, and then I think you referenced outsourcing IntelliFi to some other staffing companies. So I wanted to get some color there. And then when you talk about expanding its use to other markets, is that home care, education, locums—just a little bit more detail there? And then what kind of timeframe is there to sort of expand that platform into some of those other markets?

Kevin Clark: I will start with the last question. The timeframe is 2026. We are excited to have a whole-house strategy. We believe with the consolidation of large healthcare systems, we need to be a provider of solutions not just for nursing and allied, but also for locums and also for home-based staffing. Our strategy parallels the continuum of care. The way we have diversified our company is to be wherever we need to be from a talent acquisition perspective, providing solutions to our clients across that continuum of care. The technology that we have built, we have been building it for the last four years. We are well on our way to diversify that offering across all of our divisions.

We already have. To your point, we have licensed the technology to other companies in our industry. We have also provided a vendor-neutral VMS strategy in this industry in addition to our MSP. We have an existing footprint of locums and VMS for that particular market. These other divisions, we will be coming to market later this year, hopefully sooner than later, and we will be happy to update you on that. Amy, do you have any additional comments?

Amy Hawkins: I would just share that we have a really healthy pipeline around those items all the way through from MSP, VMS to whole-house. I would echo you. More to come early in the year.

Constantine Davides: Great. And then just a follow-up. Obviously, a lot of strike activity out there in the market. It sounds like you are going to benefit from that somewhat in the first quarter, Bill. I just wonder if you could size that for us. And then I am just curious, are there any negative effects from all this activity just in the sense of your own ability to staff on behalf of your clients?

Kevin Clark: Maybe I will just start and I will throw it over to Bill. We have participated in two labor disruption events. It is not material for us this quarter. We have a terrific division in Crew 48. We are prepared, as there are future labor disruption events, to participate. We have a strong track record of providing crisis staff historically, and we feel very confident that we could stand up whatever one of our clients may require. Bill?

Bill Burns: Kostya, I would just say, from a labor disruption perspective, to Kevin’s point, we support it too. It is not our core business. We will do it certainly with our clients. These events were not our clients, but we will support where it makes sense. We had some labor disruption revenue in the first quarter. It will be in the single millions. That is why Kevin is saying it is not really overall material. And it is not included in those travel metrics we are talking about with the travelers on assignment that are ramping continuously throughout the first quarter into the second quarter.

Operator: And would you like to go to the next question?

Bill Burns: Yes, please.

Operator: Tobey Sommer with Truist. Your line is open.

Tobey Sommer: Thank you. I wanted to ask a question about the sequential momentum that you think you have going into Q2. Is that something you are already seeing in your weekly revenue runs, or is that a product of putting together the pipeline and the new sales resources and probability-weighting an eventual impact from the combination of those two?

Kevin Clark: Hey, Tobey. Nice to hear your voice again. I do not want to speak in hypotheticals, but we were under a merger agreement last year, and perhaps our results were suppressed because of that process that we were through. As we enter 2026, we have a lot of momentum, and this company was poised for growth because we have seen a stabilization in orders. We have some wonderful clients. If you look at our specific orders, our MSP and direct orders are up from Q4 to Q1. In terms of the way we look at the business, there is plenty of demand out there. There is also plenty of competition.

This company, moving forward this year, is all about sharpened execution, rigor, and discipline, about getting the culture right, restoring the momentum coming out of that merger period of time. Marc, you might want to add some color on that.

Marc Krug: Hey, Tobey. We are realizing some sequential momentum, and we invested heavily in revenue producers late in the year. We have tweaked our models. They ramp up much faster. The results are very positive so far. We expect to continue to ramp up and gain momentum.

Bill Burns: And, Tobey, this is Bill. I would add, we are sitting here in March. Obviously, these are 13-week assignments. We have a pretty good lens into the first four to six weeks of Q2. We have a pretty optimistic view that this is going to continue on that trajectory. We are following our production weekly and are able to forecast that out.

Tobey Sommer: In terms of what you are seeing and what you think the market is like, how would you compare and contrast your own experience? I understand contextually we had the merger agreement towards the end of last year and maybe some latent ability to perform better, but I would love to hear whether you are saying that the market is in fact turning or this is really just market stabilization and you are performing a little bit better.

Kevin Clark: I can say we are performing better than we were last year, and our goal from a historical perspective is to grow above the market averages. Everybody in this company feels that way. Some of the strategic decisions we have made, some of the operating leverage that we have from our center of excellence in India, and some of the technology that we have deployed in the company and are deploying—we are an AI-first technology platform for our client side, but we are also an AI-first company from the delivery perspective. We are clearly managing the business better. As I said earlier, MSP orders are up quarter over quarter.

We have seen stabilization of bill rates—average bill rates now are around $90 to $95. We did not get the typical bump up in allied health this winter, which means that we will not see a step back in the second quarter. We will see consistent quarter-over-quarter improvement in both Allied and Travel Nursing. I cannot speak for the rest of the industry, but we are very optimistic. We are very excited about this company. We are very excited about the position that we have and our ability to execute for our customers and grow our market share this year, and get back to a trend line where we are outperforming the industry averages.

Tobey Sommer: Thanks. If I could ask you two brief ones. What are you hearing from customers about the prospective and prior changes to federal funding within the healthcare system, and I guess the subsidies on the exchanges come to mind in terms of current stuff and then Medicaid in nine months or a year? And does your fourth quarter revenue level that you outlined include any kind of strike revenue at this point, or would that be considered core revenue at this stage?

Bill Burns: I can take the latter part, Tobey. The fourth quarter revenue does not have labor disruption in it of any significant level at all. The numbers I called out a moment ago really reflect the first quarter guidance.

Kevin Clark: In terms of the first part, we have not noticed anything unusual in the marketplace. We are looking at certain segments. For example, with foreign-trained nurses, the backlog is slowly clearing. We are keeping an eye on retrogression. It still exists because of annual visa caps, but we think that there is a greater appetite for international nurse candidates as well. Nationally, we are seeing a broad usage of contingent labor. Healthcare systems are getting smarter. There is a tight cost environment, and that is why we excel.

We are not a staffing company; we are a technology company that provides staffing, and we can help our customers with solutions, whether that is building their own talent pool, managing that talent pool with our IRP technology, or helping them either in a vendor-neutral situation or as a primary supplier.

Operator: Thank you. And once again, if you would like to ask a question, you may press 1. Our next caller is Kevin Steinke with Barrington Research. Your line is open, sir.

Kevin Steinke: Hey. Thank you, and good afternoon. Wanted to start off first by asking about your comments on the sequential progression in revenue as we move throughout 2026. Are you referring to expecting the year-over-year rate of change in revenue to improve in each quarter as we move forward, and should we still expect a typical sequential revenue pullback in the third quarter just due to education staffing?

Bill Burns: Kevin, this is Bill. As we look at Q3 and Q4 into the back half, our lens right now is sequential growth across all the quarters, even as the Education business pulls back. That is predicated on continued growth in the other lines of business—travel, home-based staffing, etc. Our lens right now is that we are going to see sequential progression all throughout. When do we get to year-over-year growth? We are expecting that in the back half. Is it Q3 or is it Q4? A little bit to be seen there. We are looking at Q3 as the quarter we get back to year-over-year growth as our target, but that is going to be close.

We will see if it is in Q3 or Q4, but we are on the right trajectory. It is really about continuing to get the return on the investments we have made this year.

Kevin Steinke: Okay. Thanks. That is helpful. And you expressed some optimism about locums physician staffing moving forward, but specific to the fourth quarter, was there anything that you saw impact that business?

Bill Burns: I do not know if there is any one specific thing. It seemed to be a broader pullback across some of our larger specialties. We concentrate in primary care, hospitalist, emergency medicine, anesthesia—those are the ones where we saw the pullback. What started in the third quarter as just a handful of clients was a little bit more widespread in the fourth quarter. I do want to stress we do not know how much of this is due to disruption or distraction from the merger because we have started to see the weekly production already turn this year as we come into 2026.

The indications are that business is poised to start seeing sequential growth as we get into the second quarter.

Kevin Steinke: Okay. Great. Just lastly, you talked about the Center of Excellence in India and how that is helping drive cost savings. Can you give us some perspective on how that center of excellence has progressed over the last year in terms of capacity, what kind of work you are doing there, and how much more capacity you have there that you want to build out?

Kevin Clark: I would say Cross Country Healthcare, Inc. has done an excellent job, as Bill pointed out in his comments, reducing our headcount by 21% over the past year. We have moved a substantial number of our business processes and functions to that center of excellence in Pune, India. We now have approximately between 700 and 800 employees that work there, and it is across everything from strategic sourcing and delivery to shared services, payroll and billing, and IT and engineering. It is a full suite of employees. They have a phenomenal culture there. We are proud of the team, and they are very excited to be a part of our story, and they give us great net operating leverage.

Amy, do you want to add? You were just there recently.

Amy Hawkins: I was just there, Kevin. Thanks. I think you hit it on all fronts, but it is also important to note that they are doing a fantastic job at automation as well. As we continue to automate there and move additional pieces offshore, we continue to see better and better results.

Kevin Steinke: Okay. Thanks for the comments. Turn it back over.

Operator: Thank you. Our next caller is Bill Sutherland with Benchmark Company. Sir, your line is open.

Bill Sutherland: Hey. Thanks for the questions. I wondered if you were starting to look at an AI strategy across the enterprise. I am sure you are. Where do you think you can apply it in the next year or two?

Kevin Clark: Hey, Bill. Great question. We are infusing AI and agentic AI throughout the enterprise. We have an enterprise-wide strategy. In particular, we are leveraging agentic AI in the way that we provide delivery and recruitment, so our processes there are becoming more and more automated. We are leveraging AI technology in our locums business, for example, around the credentialing component. We think there is an opportunity. One of the things we talked about in our earlier comments is delivery speed and accelerating. A lot of what we are doing strategically is accelerating our ability to deliver candidates at the right moment for our customers, 24/7.

We are leveraging that technology almost in every part of the company, and we are constantly evaluating new tools and business processes that we want to automate. It also goes back to why I am very excited about the market environment we are in. We believe, as an innovation company, a technology-led company, that over time we can take a tremendous amount of cost out of our company, and we could see our EBITDA margins grow over time by getting operating leverage from technology. We employ a lot of people both here in the U.S. and offshore, as I mentioned, in the IT area, and we will continue to invest.

That also speaks to our strong balance sheet and our ability to leverage the cash that we have on hand to invest. We have a robust technology budget, whether it is projects that we have underway or CapEx.

Bill Sutherland: Got it. And looking at the home and education businesses, is there a way to give us a sense of their relative size? They keep moving the needle pretty nicely, and I am not sure what percent of the business they are now.

Bill Burns: Sure. I can give you that. Home-based staffing is run-rating north of $140,000,000 annualized right now, and we continue to see mid-single-digit sequential growth and double-digit year-over-year growth on that business. In Education, we had a slight pullback as we came into the fourth quarter this year, so I would say it is running at a run rate of about $75,000,000 on an annual basis.

Bill Sutherland: Okay. And that growth there is probably going to resume this year, Bill?

Bill Burns: Yes.

Bill Sutherland: The international side, do you have a pipeline that you are nurturing right now?

Kevin Clark: We do not. We partner with others, but it is an area of opportunity that perhaps we will invest in downstream because we think it is an opportunity for us to have another important part of the supply chain figured out for our customers.

Bill Sutherland: Okay. I will stop there. Thanks again for the questions.

Joshua Vogel: Thanks, Bill.

Operator: Ladies and gentlemen, this concludes the Q&A period. I will now turn the call back over to Kevin Clark for closing remarks.

Kevin Clark: Thank you, operator. I would like to thank everyone for participating in the call, and we look forward to updating you on our progress on the next call.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

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