AMN Healthcare Services (AMN) Q1 2026 earnings call transcript

Good afternoon, everyone. Welcome to AMN HEALTHCARE's first 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 in cautionary statements, including those identified in our most recently filed forms 10K and 10Q, our earnings relief, 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 Carrie Grafe, President and Chief Executive Officer, and Brian Scott, Chief Financial and Operating Officer. I will now turn the call over to Carrie.

Thank you, Randy, and good afternoon, everyone. We appreciate you joining us today. The AMN team made important achievements since the start of the year. The first quarter was defined by unusually large labor disruption activities. From an operational standpoint, it was a major milestone for AMN. We successfully supported several large events, two of which for long duration, while continuing to serve the day-to-day showcasing our rapid scaling, disciplined execution, broad and deep clinician network, and high-touch service delivery. This experience also validated the investments we've made over the past few years in our technology capabilities, including our event management system and AI recruitment. Technology that enables coordination, compliance, and real-time execution at scale, and it highlighted the strength of our mission-driven teams working across the company.

The energy and endurance of the AMN team balanced the Balancing event-specific needs and driving business as usual were awe-inspiring, demonstrating all the values and principles that make AMN special. For the first quarter, AMN delivered revenue of $1.38 billion, above our guidance range and consensus. Gross margin was 26.8%, well above our guidance range. Adjusted EBITDA was $166 million, or 12.1% of revenue. The first quarter included $722 million in labor disruption revenue and $656 million in revenue from all other AMN businesses. Nurse and Allied Solutions recorded year-over-year growth in traveler volume, excluding labor disruption travelers, for the first time since 2022.

Our Nurse and Allied staffing businesses performed better than we expected in the first quarter and are on track for continued strong performance in the second quarter. Our international staffing business grew revenue by 17% quarter over quarter, and 7% year over year. This was our first quarter of year-over-year growth in this business since the fourth quarter of 2023, shortly after the State Department implemented visa retrogression. Our leadership search business also returned to year-over-year revenue growth. While the revenues from labor disruption events are hard to predict, our ability to move thousands of clinicians to meet the urgent needs of our strategic clients delivered great value on a scale we could not have done just a few years ago.

Our solid performance in the quarter enabled us to pay down our revolver and increase our cash balance, improving our leverage ratio to 1.6 times at quarter end.

Our strong balance sheet positions us well in the industry to advance our growth strategy and drive value for our shareholders, clients, and other stakeholders. While we view the labor disruption execution as a defining accomplishment, we remain focused on the underlying drivers that enable our long-term growth plans, broader and deeper client and clinician relationships, scaled service execution, and technology enablement of our solutions. In our solution segment, first quarter revenue for Nurse and Ally Solutions was $1.13 billion, our second highest revenue for the segment in company history.

Beyond the labor disruption revenue and international nurse growth, travel nurse revenue grew 13% year over year, and Ally was up 3%. Bill rates and hours also move favorably, with average bill rate up 6% year-over-year due to a surge in rapid response placement. Nurse demand has been muted, so demand in recent weeks improved to be flat year-over-year. Allied demand has been growing year-over-year since 2025. Our teams are executing very well at filling the available demands.

For the second quarter, we expect Nurse and Ally Solutions revenue to be flat to down 2% year-over-year, including a normalization of the segment bill rate. First quarter revenue for Physician and Leadership Solutions was $164 million, lower by 6% year-over-year. Locum tenants volume was down 9% year-over-year, and revenue per day filled was up 3%. Interim leadership volume was down, partially offset by an increase in pricing.

Our search business was highlighted by strong growth in physician permanent placement and new executive searches. We continue to see locum clients focused on managing spend by centralizing program management and hiring permanent physicians. And we have both a healthy pipeline of locums MSP prospects as well as a new locums MSP client in the quarter. We also renewed and expanded the contract with our largest locums client. MSP volume was up year over year, and we are driving toward making MSP a higher percentage of our revenue mix. Overall, locum's demand has been softer, with more demand in a third-party channel, which is more competitive and harder to fill. Our lower fill rates in that channel more than offset our MSP progress.

Similar to what we did in our nurse business to improve performance in vendor-neutral programs, we have initiatives in place to tech-enable and automate our locum's recruiting process to increase speed, As well as adding more recruiters to enable higher fill rates. Leadership Solutions has rolled out refreshed go-to-market approaches for executive and leadership search and interim to align with clients' current challenges, including accelerating healthcare C-suite turnover, rising demand for digitally fluent, data-driven leaders, and developing sustainable workforce strategies. Operationally, the team is improving fill rates with AI-enabled candidate matching and enhanced tech and data capabilities to support our search consultants. In the second quarter, we expect physician and leadership solutions revenue to be down approximately 6% to 8% year-over-year.

Our revenue in technology and workforce solutions was $87 million, down 15% year-over-year, or 10% excluding the business we divested last year. Language services continue the rollout of our tiered service and pricing strategy, and we are pleased with our progress, including increased new sales wins and gross margin improvements in the first quarter. Our updated model enables us to serve our clients with the broadest set of language access services while delivering superior clients and patient experience and outcomes.

On our WorkWise workforce technology platform, we rolled out new AI-driven tools designed to help our customers fill roles faster and improve the quality of candidate matches. We added automated candidate scoring, improved search across open orders and available staff, and made it easier to create clear job descriptions, improving speed and overall hiring efficiency. We already used our AI recruiter to deploy more than 10,000 clinicians in the first quarter. We also introduced supplier performance analytics, which gives clients more transparency into supplier quality, responsiveness, and outcomes.

Overall, these updates further differentiate work-wise and reinforce our ability to help healthcare organizations make better workforce decisions and manage staffing more efficiently. Our technology enablement has also strengthened our engagement with healthcare professionals. Our market-leading clinician app, AMN Passport, plays a critical role in how we improve the connection between client needs and the labor force. Over the past year, we increased the features and utility of Passport, and as a result, Passport users are up more than 30% year-over-year, With monthly active users up more than 50%. Based on positive client reception, we are accelerating our go-to-market strategy for WorkWise beyond our current client base, and we expect this acceleration to support new sales heading into the second half of the year.

For the second quarter, we expect technology and workforce solutions revenue to be down approximately 14% to 16% year-over-year, which implies an improved sequential trend compared with the past two quarters. Overall, we are encouraged by our start to the year, with some key solutions returning to year-over-year growth and plans for additional solutions to return We remain confident that we are moving toward a business model in which we can sustain long-term revenue growth and grow adjusted EBITDA at twice the rate of revenue growth. Our first quarter performance was a significant demonstration of AMN capability to scale quickly and deliver I will now turn the call over to management for a new team that will be a to help and deliver at a high level integrating technology operational execution and a mission team under intense conditions Great people are at the center of our mission and our culture.

As we celebrate National Nurses Week this week, we are grateful to and for the tens of thousands of nurses we have the privilege of working with, To enable continuous, high-quality patient care delivered across a wide range of care settings and locations.

With that, I'll turn the call over to Brian to walk through the financial details and outlook considerations.

Thank you, Carrie, and good afternoon, everyone. First quarter consolidated revenue was $1.38 billion, significantly above the high end of our guidance range, driven in large part by labor disruption revenue, Exceeding our guidance by $122 million. We also had better than expected performance from our travel nurse, allied, and international businesses. Consolidated gross margin for the quarter was 26.8% above the high end of guidance. Year-over-year gross margin declined to 190 basis points and sequentially was up 70 basis points. First quarter consolidated SG&A expenses were $218 million. Adjusted SG&A, excluding certain items, was $205 million, up compared to the prior year and prior quarter, driven by over $70 million in costs related to the large labor disruption event.

First quarter nurse and allied revenue was $1.1 billion, up 173% year-over-year, about 130% sequentially. Excluding $722 million in labor disruption revenue, NURSE and ALID revenue was $405 million, up 8% year-over-year and up 11% sequentially. NURSE revenue excluding labor disruption was $254 million, up 12% year-over-year and 16% sequentially. The growth was driven in part by strong rapid response volume and associated higher bill rates, along with the international business recovery. Allied revenue was $151 million, up 3% both year-over-year and sequentially. Year-over-year segment volume increased 3%, average bill rate increased 6%, and average hours worked increased 1%. Sequentially, volume and average bill rate increased 6%, and average hours worked increased 2%. The higher bill rate was driven mostly by the rapid response revenue that is not expected to recur in the second quarter.

Nurse and allied gross margin in the quarter was 25.1%, up 240 basis points year-over-year, and 350 basis points sequentially, as labor disruption and rapid response revenue had a favorable impact on the segment margin.

Moving to Physician and Leadership Solutions, first quarter revenue was $164 million, down 6% year-over-year and 3% sequentially. Locum Tenants revenue was $131 million, down 7% year-over-year and 4% sequentially. Interim Leadership revenue was $23 million, down 4% year-over-year and 5% sequentially, while search revenue of $10 million was up 4% both year-over-year and sequentially. Segment gross margin for the first quarter was 26.1%, down 120 basis points year-over-year and 140 basis points sequentially. The decrease in gross margin is primarily due to a lower margin in locums and a drag of 110 basis points from increased sales reserves booked in the quarter. In technology and workforce solutions, first quarter revenue was $87 million, down 15% year-over-year and 1% sequentially.

Excluding the July 2025 sale of SmartSquare, revenue was down 10% year-over-year, driven mainly by a decrease in pricing and billed minutes in language services. The first quarter language services revenue was $69 million, down 8% year-over-year and 1% sequentially. The MS revenue was $16 million, down 18% year-over-year and 2% sequentially. Segment gross margin was 50%, down 550 basis points year-over-year, driven by pricing pressure in language services and an unfavorable business mix. The quarterly gross margin increased by 190 basis points, which included a 200 basis point improvement in the language services margin, reflecting the service model changes Carrie mentioned in her opening comments. First quarter net income was $62 million. This compared with a net loss of $1 million in the prior period and a net loss of $8 million in the prior quarter.

First quarter consolidated adjusted EBITDA was $166 million. Adjusted EBITDA margin for the quarter was 12.1%, above the high end of guidance and up 280 basis points from the prior year period and 480 basis points sequentially.

Days sales outstanding for the quarter was 26 days. Excluding working capital effects from the large labor disruption event, DSO was 54 days, 4 days lower year-over-year, and 2 days lower sequentially. Operating cash flow for the quarter was $562 million, and capital expenditures were $7 million.

At quarter end, we had $561 million in cash and equivalents, with a large portion of this cash increase from excess client deposits for the labor disruption events. We ended the first quarter with $367 million in client deposits, of which we have already refunded approximately $250 million this quarter. Assuming the remainder of the deposits are repaid this quarter, we would anticipate having approximately $175 million in cash at quarter end. We ended the first quarter with total debt of $750 million, and our leverage ratio as calculated per our credit agreement was 1.6 times.

Moving to the second quarter outlook, we expect consolidated revenue in the range of $620 to $635 million. The report is expected to be 28 to 28.5%. Reported SG&A is projected to be approximately 23 to 23.5% of revenue, reflecting continued cost discipline while supporting growth initiatives. Operating margin is expected to be minus 0.6% to plus 0.1%, and adjusted EBITDA margin is expected to be 6.7% to 7.2%. Additional guidance details are provided in our earnings release.

To echo Carrie's comments, we remain confident that we have the team and strategy to deliver leading tech-enabled solutions that will drive sustainable revenue growth with improved operating leverage. With that, operator, please open up the line for questions.

Yeah, thanks, Melissa. Overall, we are seeing clients continue to focus on cost management, as well as ensuring that they have the workforce in place to be able to support increasing levels of patient utilization. So those two themes have continued. To your point, the conversation has shifted with clients where getting to more normalized both utilization levels and building The low rate levels of contract labor was a lever, a big lever coming out of the pandemic. That really has normalized, and we've seen stability for a couple quarters now. The conversations with clients have really shifted back to what are the levers that we can use to more sustainably create a high-quality, cost-effective workforce and get into more of a total talent type of solution platform, which we are And it's conversations around how do I do more predictive analytics about what my needs are?

How do I ensure that I am leveraging the talent that I have most effectively? How am I tech enabling some of my solutions to be able to close some of the gaps between increasing levels of patient utilization and staffing? So we have seen those conversations really shift back to what are the more sustainable total talent strategies that you're going to be able to utilize to support your patient growth volume.

Great.

Yeah, so we supported in the quarter five labor disruption events. Three of them were large. Two of the three were indefinite. That was historic for us. That was historic for the industry. And when you go through those types of crisis events with clients, your relationships get deeper and stronger. It was an incredibly important moment for the clients that we were supporting in those events. And so we were able to do that successfully, help ensure that they were able to go through and deliver continuous high quality care for their patients. And that is a very important service, not only what we did in the first quarter that took years of planning to get there, but what we would expect to do in future years with clients going through those events.

Great. Thank you so much again for the caller.

Yeah, hey Jeff. Well, typically they are shorter duration assignments where the client is also looking for us to get somebody deployed very quickly. So that, in this case, there was some kind of carryover between the, or crossover between the labor reception events and these rapid response orders. And so the rates are typically higher, but it also comes with that as a much higher pay rate as well. So I wouldn't think of it as much as a significant margin enhancer. But it does have an impact on the volume and higher revenues. So we mentioned the bill rate being much higher in the first quarter. That was in part because of the mix of those rapid response orders that we had in the quarter.

The underlying trend around bill rates hasn't changed a whole lot in the last several quarters, but it was elevated. That's why we made a point of calling it out as we look at the second quarter. We expect, you know, the rates to normalize. But it was very valuable for clients because, again, they had that rapid need and were able to deliver really high fail rates on those orders.

Hey, Jeff, one of the things that happens when you're in a longer-duration crisis, like two of the labor disruption events that we supported, is you can layer in rapid response. It's still an immediate need, but it is more cost-effective for the client. So it was part of a strategy that we were utilizing with clients to be able to really minimize the cost of them being able to support a long-duration crisis.

You've seen some of that consolidation pick up more recently. Obviously, there's an announcement yesterday about one competitor, but you've seen some merging in some places, both of more traditional staffing companies, but also of some of the more tech-enabled types of solutions. You've seen over the past year some workforce farms that had gotten into nursing get out of nursing. So you're seeing it play out in a couple different ways. But we would expect for that consolidation to continue.

Yeah, absolutely. I think that's, you said it's taking a little longer, and we know that there's still some of our competitors that have, you know, are dealing with, you know, larger amounts of leverage, and they're working through that, and so I think that will tend to ultimately drive more consolidation as well. And then some of the platform players, again, as they've consolidated, I think it's a reflection of many clients really looking for partners to help them more effectively manage their labor force and be thoughtful about the right mix and fulfillment. And so if you're purely just a platform player, you may be able to just deliver on some fill, but you're not really bringing incremental value to the clients because they're trying to really manage their costs in the most effective way.

We think that's an important part of our strategy is really being a thought partner with our customers to help them optimize their utilization of perm, contingent. How do we help them on both of those fronts? And I think that's more and more of those are the conversations and where we can really be a bigger partner for our customers.

Let me give you some comments about what we're seeing in demand, and Brian can kind of layer in. We gave a lot of numbers taking out labor disruption very intentionally, so you could get a good sense of where we are in the businesses without those events coming through. Do we feel good about how we started the year overall? NURSE and Allied, you are seeing healthy demand in Allied. You're seeing particularly the past couple weeks an uptick in demand in NURSE, so we're about flat year-over-year with where we were this time last year. Allied turned to year-over-year demand growth in 2025 and has continued. And so we see into, you know, Q2, continued strong, especially field performance across NURSE and Allied.

If we look at PLS, in LOCUMs, I made some comments in my beginning statement where we've seen weaker demand as we started off the year. We've seen a bit of an uptick over the past couple weeks, but a lot of that demand structurally is in the third-party channel, We have a number of initiatives and a lot of successful proof points with what we did in that space in Nurse and Allied, and we have that underway in locum. So as we go through the year, we feel better about our capabilities in locum to be able to compete in that space. I would expect to get to year-over-year growth in the first part of 2027. Search is already there, and we expect it to stay there in year-over-year growth.

And then if we go into the TWS segment, we talked about both Brian and I, what we're seeing already from the service model rollout that we've talked about the past two quarters. We feel very good about how that's being operationalized and the outcome. And we expect that service model improvement to continue throughout the course of this year. And for VMS, we would expect us to continue to onboard new client wins as we go through the year and get to year-over-year growth in 2027.

I appreciate that.

I was going to add, AJ. The allied team has done a really fantastic job, both in our traditional disciplines with therapy, imaging, lab, respiratory. All of them are up, and then our schools business continues to have really strong momentum, as we talked about in the last couple of quarters. And so both demand and fulfillment teams are performing really well. And as Kerry mentioned, international is back to growth as well. So if you look at the nurse and allied segment, in total, excluding labor disruption, you know, we're back to, the guide would presume, you know, kind of flat to slightly up, and that's where we see the potential to continue to have a positive year-over-year comp going forward here, driven more right now by international allies, including I mean, the school's business, the travel nurse business is right on the cusp of getting back to a positive year-over-year growth on a consistent basis.

So, you know, I feel really good about the momentum in that segment.

Yeah, thanks, AJ. And I think, you know, we talked about that a few months ago, and that's really meant to be kind of our longer-term growth algorithm. And as we kind of lay that out, there was a working assumption that we'd have the businesses, you know, all predominantly back into a growth mode. And so as Kerry kind of walked through some of the service lines and where we are, you know, we have confidence as we move into 2027, we have good opportunity to get back to a growth model across our service lines. That's really where you start to see that kick in. So it's partly a function of with top line growth, we laid out more in a 4% to 6% range.

That would occur some point later in 2027 as we get all the businesses growing. When that happens in conjunction with a lot of the operational changes we continue to make to be a more efficient model, that's process changes, automation, more deployment of AI, we think we can drive a more efficient model, and we've got to be able to leverage our platform already. So I think the combination of continued process improvements and technology improvements, along with getting the top line business growing consistently, that would absolutely give us the opportunity to get that double-digit EBITDA growth.

And AJ, the other things that we'd want to see in terms of just things we track beyond the demand comments that I've made is, you know, we continue to see stabilization in bill rates in NERS. You've seen some modest increases in allied and in locum. We want to see as we leave this year increases in those bill rates. We're seeing that with some clients as they want to get orders billed, but you want to see that more sustainably to mirror what you would expect to be some increases in the labor market. We saw some modest uptick in average hours work. That would also be something that as we leave this year, that would be something else that would be very constructive overall of the industry turning from stabilization to more sustained growth.

Yeah, thanks there, Tyler. So the intrusion dynamic, as we talked about in the prepared remarks with the cash balance, our credit agreement actually has a governor on the amount of cash we can apply towards our net debt. So that's where we get that 1.6 times. But as I mentioned, as you work through a refunding of a fair amount of the cash balance during the second quarter, that would basically end up with a pretty similar leverage ratio at the end of Q2 based on our guidance.

And right now, if you roll that to the rest of the year, we'd expect to have a leverage ratio that would be at two times or less through the remainder of this year. So we feel really positive about our position in the balance sheet. We've paid off our revolver. We've extended the maturities of our existing debt out to 2029 and 2031, and so we think this puts us in a really strong position on the balance sheet to really focus exclusively on how we grow in the business here, and that's investing in our teams and our operations, accelerating some of the capital investments that we have already laid out to grow the business as well, and gives us a lot more flexibility to consider different capital allocations.

Yeah, for the segment overall, we absolutely see the ability for us to maintain positive year-over-year growth in our volume. Again, I kind of laid out, and really all the teams are executing really well. Carrie mentioned our, you know, the demand environment in nursing has been stable, but a bit muted. I think we'll expect to see that pick up, and we continue to look for ways to expand our client relationships and bring in new clients, both our strategic MSP and VMS, but also more direct relationships. So that will open up more demand opportunity. But the teams are doing a fantastic job of filling into the demand that we have across our NERS, allied, and international businesses.

So I think that's where we have confidence we can continue to grow volume as we go through this year.

So they're bridging from Q1 to Q2?

Yeah, so there are a couple of moving pieces, as you can imagine, particularly with the large amount of labor disruption revenue in the first quarter. So the 26.8 that were reported, as I mentioned in prepared remarks, we did have some drag from some sales adjustments that predominantly hit our position of leadership segment. So what I say is if you really tried to kind of strip out some of the different kind of one items you look at a gross margin in the first quarter a little over 27 or 27 27 range The guidance we given for Q2 the midpoint is 28 As we talked about there about million of labor disruption revenue embedded in that guidance Part of that is actual contractual activities that we got But there's also a part, as we reconciled some prior year events and finalized those invoices, there was some benefit from that, which is that it kind of flows straight through.

So that gross margin is a bit elevated in our guide for the second quarter. You should think about it still being a little bit more in the 27.5% range for Q2. I think it's important as you think about that, even as you're looking at our expectations for the remainder of the year, that's really the right way to think about the launching point for the third and fourth quarter as well.

Yeah, so overall, consistent with what we talked about last quarter, we would expect high-team year-over-year growth in international this year. We had improvement in the retrogression date over the past quarter, but what you're really seeing now is those candidates going into the next phase of the approval process, which is sitting at the embassies. We haven't assumed any significant acceleration of those candidates through the embassy process. We'll know more over the coming, I'd say, kind of quarter plus how that's going. But if that goes faster than what we're anticipating, then you would see maybe some lift at the very end of this year that would help support some low double-digit growth into next year. We are not assuming at this point that you're going to see any lift of any of the travel bans or the travel suspensions.

That would also be a tailwind to our assumptions and would predominantly affect and be accretive to 2027 growth.

We don't have total insight. Obviously, for companies that are more public about their results, we have some insight. And I think the piece that we always focus on is what is the percentage, because obviously the underlying cost of labor, whether it's contingent or permanent, has gone up since 2019. I would say overall, when we compare our current client base to clients that we see, or I should say prospects that we see in our pipeline, we see more of our non-clients who may still have a little bit of work to do to get the utilization levels down. We were very partnering with our clients post the pandemic to get them down to more sustainable utilization levels.

So I would say generally across our client base, they're more focused and shifting towards how do I build and retain my workforce as opposed to how am I reducing that.

Yeah, and I think there's also, I think there's more and more recognition of this inflection we've seen where the aggressive permanent hiring that was done post-pandemic has also led to significant wage increases for permanent labor. And so there, you know, and you look at the reset that's occurred in bill rates for contract labor, and you're suddenly at this point where we talked before the differential is, can be very small. Sometimes there's no differential. And so as clients think about fluctuating patient volumes, you know, you know, make, managing their total amount of labor. I think that's for shifting more to that dialogue versus just purely focusing on the contract labor volume. It's more what is their total cost of their labor and what is the value of having flexibility.

And so I think that's where we're seeing more dialogue and less focus on that reduction at this point.

Yeah, let me do a high level, and then I'm going to turn it over to Nishan to add some color. So we have been operationalizing a new service model that we talked about the past couple quarters that really has three enhancements to it. One is an increased offshore mix of resources, right? We always have an onshore offshore mix. It's them utilizing their devices as opposed to us providing it. And more accommodating SLA. So kind of longer speed to answer in some cases. So we have been rolling that out since the end of last year. And I would attribute that to most of what you've seen on the margin piece.

But Nishan, maybe talk a little bit about the competitive environment and pricing.

Competitive environment continues to be there, although we do see it maybe calming down a little bit through this year. But we expect staying through the balance of this year, but it is starting to stabilize a bit more. So feeling much more positive about our competitive position and posture in the market.

And I just want to point out that the 200 basis points was sequential. So we're still down. We're down year over year. But, you know, we've seen that decline. We saw it throughout 2025. And so with the model changes, this is the first quarter we've seen it start to influx back up again. So even though we're seeing pricing come down, the changes we've made in our cost structure for how we're delivering our services, which, again, focuses still always on the highest quality in the industry, but we've been able to do it in a way we've been able to bring down our costs for the delivery that's helping us improve that margin.

I think there's going to be a cycle that you have to work through for some of these pricings as maybe some contracts come up. I think there's still going to be a tail of that, that we've already factored into this. And so, but we do believe that, to Nishan's comment, it's a much more stable environment than we had seen in the past. We're also seeing an expect minutes quarter over quarter to be flat. So there's more stability that we're seeing than we have seen in the past. But we think it's going to be competitive. And we think there's going to continue to be, you know, competition for the business and particularly consolidation. We've been very focused on not just getting new clients, but consolidating spend with some of our larger clients.

The other piece that I'll mention, I know we talked about this on the last call as well, is one of our areas of focus in our service model is how do we support the end-to-end patient experience? So while there is a moat around the clinical experience that there has to be a human involved in that interpretation, there is an opportunity for us from an admission standpoint, a discharge standpoint, to use more AI-enabled capabilities that we are working on.

I think we continue to see overall focus on cost management. So where we're seeing clients increase fill rates is when positions are not getting filled. And so I think that dynamic is going to be the dynamic that is going to really be the tailwind behind bill rates increasing. When you have positions that are priced appropriately, you see them filled. So that dynamic, I think, will continue. And as clients need more of these positions, with a higher degree of urgency, you will see more of those bill rates increase. But I would expect that to happen over time, and it'll really be probably market by market and client by client.

You know, what I would say overall is while we saw this time last year much more of a pause to step back and assess, okay, what are the implications of, you know, big, beautiful bills, what we're seeing now is really a focus on just how do we support what is expected to be an increase in the Inpatient utilization just from an aging population demographic and do that when we know there is going to be at some point a limited amount of clinicians.

And so how do we start having those strategies and do that in a way that is cost effective? Because our costs are going up higher than what we are getting reimbursed for. So I'd say that is still the general theme that we are hearing, and what we are feeling is still a focus on those cost-spending strategies for the workforce, including how do we ensure on the physician side that we are fully staffed so that we can maximize revenue. And to your other question on the leadership side, we did talk about that in the prepared remarks that as we talk about the aging clinical population, in fact, you're also seeing an aging leadership population within healthcare and the changing of the skill sets needed to navigate this environment.

And so we are, as we try our go-to-market strategy and the way we're interacting with clients and bringing value, I think there's a lot of opportunity for us to help them find the right talent for where they are in that journey. And so I think we're feeling good about our position in that market to grow our leadership, both interim and our search businesses, to address some of the talent, kind of the pending talent gaps we think are going to occur, as well as some of the new skills that are needed to help our clients navigate this world as well.

Thank you all for your interest in AMN, and a very special thank you to our extraordinary team and the strong partnerships that we have with our clients, clinicians, and suppliers, who collectively helped us get off to a very strong start to the year.