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, reflecting ongoing challenges in core nurse and allied staffing, while 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), down 68% year-over-year and 7% sequentially, excluding a $19 million bad debt charge from a client bankruptcy.

• Cash and cash equivalents totaled $69.6 million at quarter-end, with no debt outstanding and strong operating cash flow of $82.4 million.

• Technology investments, especially in the Intellify platform, continue to drive operational efficiency and client wins, with over 90% of travel customers transitioned.

Financial highlights

• Q2 consolidated revenue was $339.8 million, down 37% year-over-year and 10% sequentially, mainly due to declines in travel and local assignments.

• Gross profit margin was 20.8%, down 200 bps year-over-year but up 40 bps sequentially.

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

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

• Credit loss expense rose to $19 million in Q2 2024, mainly due to a large customer bankruptcy.

Outlook and guidance

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

• Q3 adjusted EBITDA guidance: $10–$13 million (margin 3–4%), down 63%–52% year-over-year.

• Adjusted EPS expected between $0.08 and $0.12, with gross margin guidance at 21%.

• Sequential revenue growth anticipated in Q4 as travel demand and new client wins ramp up.