Cross Country Healthcare (CCRN) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $339.8 million, down 37% year-over-year and 10% sequentially, mainly due to declines in nurse and allied staffing; home care and physician staffing segments grew.

• Net loss attributable to common stockholders was $16.1 million, compared to net income of $21.3 million in Q2 2023.

• Adjusted EBITDA was $14.2 million (4.2% margin), near the high end of guidance but down 68% year-over-year.

• Technology investments, especially in the Intellify platform, are driving operational efficiencies and new client wins, with over 90% of travel customers transitioned.

• Cash flows from operations reached $82.4 million, with $69.6 million in cash and no debt at quarter end.

Financial highlights

• Q2 consolidated revenue was $339.8 million, down 37% year-over-year and 10% sequentially.

• Gross profit margin was 20.8%, up 40 bps sequentially but down 200 bps year-over-year due to higher lodging subsidies and insurance costs.

• SG&A expense was $60 million, down 5% sequentially and 24% year-over-year; SG&A as % of revenue was 17.7%.

• Adjusted EPS was $0.10, toward the lower end of the range due to a higher tax rate.

• Net loss was $16.1 million, with diluted EPS of $(0.47).

Outlook and guidance

• Q3 2024 revenue guidance: $305–$315 million, a sequential decline of 7–10% and 31–29% year-over-year.

• Adjusted EBITDA guidance: $10–$13 million (margin 3–4%), down 63–52% year-over-year.

• Adjusted EPS guidance: $0.08–$0.12, based on 33.5 million shares.

• Gross margin expected at 21% for Q3.

• Sequential revenue growth anticipated in Q4 as demand and production improve.