

x☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

For the transition period from to

Commission File No.: 001-16753

AMN HEALTHCARE SERVICES, INC.

(Exact Name of Registrant as Specified in Its Charter)



Delaware			06-1500476
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

~~12400 High Bluff Drive,~~ 2999 Olympus Boulevard	Suite ~~100~~ ~~San Diego, California~~ 500		~~92130~~
Dallas	Texas	75019
(Address of Principal Executive Offices)			(Zip Code)

Registrant’s Telephone Number, Including Area Code: (866) 871-8519

____________________

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 par value	AMN	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and ~~"emerging~~“emerging growth ~~company"~~company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

Large accelerated filerx

☒

Accelerated filer o

☐

Non-accelerated filero

☐

Smaller reporting companyo

☐

Emerging growth companyo

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange

Act). Yes o☐ No x

As of ~~November 1, 2017~~,August 2, 2023, there were ~~47,772,333~~37,988,128 shares of common stock, $0.01 par value, outstanding.

Auditor Name: KPMG LLP Auditor Location: San Diego, California Auditor Firm ID: 185

TABLE OF CONTENTS


Item		Page

	PART I - FINANCIAL INFORMATION

1.	Condensed Consolidated Financial Statements (unaudited):	1
	Condensed Consolidated Balance Sheets, As of June 30, 2023 and December 31, 2022	1
	Condensed Consolidated Statements of Comprehensive Income, For the Three and Six Months Ended June 30, 2023 and 2022	2
	Condensed Consolidated Statements of Stockholders’ Equity, For the Six Months Ended June 30, 2023 and 2022	3
	Condensed Consolidated Statements of Cash Flows, For the Six Months Ended June 30, 2023 and 2022	4
	Notes to Unaudited Condensed Consolidated Financial Statements	6
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
3.	Quantitative and Qualitative Disclosures about Market Risk	26
4.	Controls and Procedures	27

	PART II - OTHER INFORMATION


1.	Legal Proceedings	28
1A.	Risk Factors	28
2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
3.	Defaults Upon Senior Securities	29
4.	Mine Safety Disclosures	29
5.	Other Information	29
6.	Exhibits	30
	Signatures	31

Item Page

PART I - FINANCIAL INFORMATION

1.
Condensed Consolidated Financial Statements (unaudited):
1

Condensed Consolidated Balance Sheets, As of September 30, 2017 and December 31, 2016
1

Condensed Consolidated Statements of Comprehensive Income, For the Three and Nine Months Ended September 30, 2017 and 2016
2

Condensed Consolidated Statements of Cash Flows, For the Nine Months Ended September 30, 2017 and 2016
3

Notes to Unaudited Condensed Consolidated Financial Statements
5
2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
14
3.
Quantitative and Qualitative Disclosures about Market Risk
22
4.
Controls and Procedures
23

PART II - OTHER INFORMATION

1.
Legal Proceedings
24
1A.
Risk Factors
24
2.
Unregistered Sales of Equity Securities and Use of Proceeds
24
3.
Defaults Upon Senior Securities
24
4.
Mine Safety Disclosures
24
5.
Other Information
24
6.
Exhibits
25

Signatures
26

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

AMN HEALTHCARE SERVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited and in thousands, except par value)


	June 30, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	7,013	$	64,524
Accounts receivable, net of allowances of $36,401 and $31,910 at June 30, 2023 and December 31, 2022, respectively	579,926		675,650
Accounts receivable, subcontractor	168,231		268,726
Prepaid expenses	17,965		18,708
Other current assets	34,101		66,037
Total current assets	807,236		1,093,645
Restricted cash, cash equivalents and investments	71,564		61,218
Fixed assets, net of accumulated depreciation of $250,150 and $227,617 at June 30, 2023 and December 31, 2022, respectively	177,417		149,276

Other assets	219,781		172,016
Goodwill	935,779		935,364
Intangible assets, net of accumulated amortization of $401,217 and $361,327 at June 30, 2023 and December 31, 2022, respectively	432,366		476,832
Total assets	$	2,644,143	$	2,888,351
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	327,538	$	476,452
Accrued compensation and benefits	261,629		333,244




Other current liabilities	84,548		48,237
Total current liabilities	673,715		857,933
Revolving credit facility	190,000		—
Notes payable, net of unamortized fees and premium	844,097		843,505
Deferred income taxes, net	6,986		22,713

Other long-term liabilities	163,048		120,566
Total liabilities	1,877,846		1,844,717
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value; 10,000 shares authorized; none issued and outstanding at June 30, 2023 and December 31, 2022	—		—
Common stock, $0.01 par value; 200,000 shares authorized; 50,339 issued and 37,987 outstanding at June 30, 2023 and 50,109 issued and 41,879 outstanding at December 31, 2022	503		501
Additional paid-in capital	467,387		501,674
Treasury stock, at cost; 12,352 and 8,230 shares at June 30, 2023 and December 31, 2022, respectively	(1,086,862)		(698,598)
Retained earnings	1,386,012		1,240,996
Accumulated other comprehensive loss	(743)		(939)
Total stockholders’ equity	766,297		1,043,634
Total liabilities and stockholders’ equity	$	2,644,143	$	2,888,351

September 30, 2017 December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents $ 19,625
$ 10,622
Accounts receivable, net of allowances of $11,381 and $11,376 at September 30, 2017 and December 31, 2016, respectively 343,596
341,977
Accounts receivable, subcontractor 37,200
49,233
Prepaid expenses 15,832
14,189
Other current assets 26,220
34,607
Total current assets 442,473
450,628
Restricted cash, cash equivalents and investments 34,380
31,287
Fixed assets, net of accumulated depreciation of $94,531 and $84,865 at September 30, 2017 and December 31, 2016, respectively 68,188
59,954
Other assets 73,962
57,534
Goodwill 340,596
341,754
Intangible assets, net of accumulated amortization of $85,990 and $72,057 at September 30, 2017 and December 31, 2016, respectively 231,791
245,724
Total assets $ 1,191,390
$ 1,186,881
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 117,934
$ 137,512
Accrued compensation and benefits 111,984
107,993
Current portion of notes payable, less unamortized fees —
3,750
Deferred revenue 9,609
8,924
Other current liabilities 5,440
16,611
Total current liabilities 244,967
274,790

Notes payable, less unamortized fees 319,652
359,192
Deferred income taxes, net 11,899
21,420
Other long-term liabilities 82,673
82,096
Total liabilities 659,191
737,498
Commitments and contingencies

Stockholders’ equity:
Preferred stock, $0.01 par value; 10,000 shares authorized; none issued and outstanding at September 30, 2017 and December 31, 2016 —
—
Common stock, $0.01 par value; 200,000 shares authorized; 48,402 issued and 47,772 outstanding, respectively, at September 30, 2017 and 48,055 issued and 47,612 outstanding, respectively, at December 31, 2016 484
481
Additional paid-in capital 451,136
452,491
Treasury stock, at cost (630 and 443 shares at September 30, 2017 and December 31, 2016, respectively) (20,358 ) (13,261 )
Retained earnings 101,062
9,671
Accumulated other comprehensive income (loss) (125 ) 1
Total stockholders’ equity 532,199
449,383
Total liabilities and stockholders’ equity $ 1,191,390
$ 1,186,881

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

AMN HEALTHCARE SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited and in thousands, except per share amounts)


	Three Months Ended September 30,					Nine Months Ended September 30,							Three Months Ended June 30,				Six Months Ended June 30,
	2017			2016		2017			2016				2023		2022		2023		2022
Revenue	$	494,406		$	472,636	$	1,479,378		$	1,414,367		Revenue	$	991,299	$	1,426,607	$	2,117,522	$	2,979,145
Cost of revenue	334,867			318,169		997,051			953,249			Cost of revenue	661,018		966,370		1,418,395		2,022,740
Gross profit	159,539			154,467		482,327			461,118			Gross profit	330,281		460,237		699,127		956,405
Operating expenses:												Operating expenses:
Selling, general and administrative	100,579			99,995		299,325			297,359			Selling, general and administrative	201,771		244,430		407,370		502,009
Depreciation and amortization	8,132			7,789		23,759			21,888
Depreciation and amortization (exclusive of depreciation included in cost of revenue)												Depreciation and amortization (exclusive of depreciation included in cost of revenue)	36,847		32,274		74,424		62,930
Total operating expenses	108,711			107,784		323,084			319,247			Total operating expenses	238,618		276,704		481,794		564,939
Income from operations	50,828			46,683		159,243			141,871			Income from operations	91,663		183,533		217,333		391,466
Interest expense, net, and other	4,837			3,016		14,895			9,065			Interest expense, net, and other	12,175		10,080		22,434		19,669
Income before income taxes	45,991			43,667		144,348			132,806			Income before income taxes	79,488		173,453		194,899		371,797
Income tax expense	17,863			16,371		52,957			53,319			Income tax expense	18,582		49,653		49,883		101,989
Net income	$	28,128		$	27,296	$	91,391		$	79,487		Net income	$	60,906	$	123,800	$	145,016	$	269,808

Other comprehensive income (loss):												Other comprehensive income (loss):
Foreign currency translation and other	(73		)	40		(111		)	165
Cash flow hedge, net of income taxes	—			231		(15		)	(343		)
Unrealized gains (losses) on available-for-sale securities, net, and other												Unrealized gains (losses) on available-for-sale securities, net, and other	50		332		196		(575)
Other comprehensive income (loss)	(73		)	271		(126		)	(178		)	Other comprehensive income (loss)	50		332		196		(575)

Comprehensive income	$	28,055		$	27,567	$	91,265		$	79,309		Comprehensive income	$	60,956	$	124,132	$	145,212	$	269,233

Net income per common share:												Net income per common share:
Basic	$	0.59		$	0.57	$	1.91		$	1.66		Basic	$	1.56	$	2.78	$	3.60	$	5.90
Diluted	$	0.57		$	0.55	$	1.85		$	1.61		Diluted	$	1.55	$	2.77	$	3.58	$	5.87
Weighted average common shares outstanding:												Weighted average common shares outstanding:
Basic	47,912			48,049		47,870			47,993			Basic	39,151		44,504		40,258		45,702
Diluted	49,445			49,410		49,480			49,287			Diluted	39,341		44,740		40,454		45,972

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

AMN HEALTHCARE SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited and in thousands)


	Common Stock			Additional Paid-in Capital		Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Loss		Total
	Shares	Amount				Shares	Amount
Balance, December 31, 2021	49,849	$	498	$	486,709	(2,586)	$	(121,831)	$	796,946	$	(295)	$	1,162,027
Repurchase of common stock	—	—		—		(2,298)	(228,024)		—		—		(228,024)
Equity awards vested, net of shares withheld for taxes	164	2		(9,433)		—	—		—		—		(9,431)

Share-based compensation	—	—		11,259		—	—		—		—		11,259
Comprehensive income (loss)	—	—		—		—	—		146,008		(907)		145,101
Balance, March 31, 2022	50,013	$	500	$	488,535	(4,884)	$	(349,855)	$	942,954	$	(1,202)	$	1,080,932
Repurchase of common stock	—	—		—		(1,876)	(173,867)		—		—		(173,867)
Equity awards vested, net of shares withheld for taxes	19	—		(366)		—	—		—		—		(366)
Share-based compensation	—	—		8,513		—	—		—		—		8,513
Comprehensive income	—	—		—		—	—		123,800		332		124,132
Balance, June 30, 2022	50,032	$	500	$	496,682	(6,760)	$	(523,722)	$	1,066,754	$	(870)	$	1,039,344


	Common Stock			Additional Paid-in Capital		Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Loss		Total
	Shares	Amount				Shares	Amount
Balance, December 31, 2022	50,109	$	501	$	501,674	(8,230)	$	(698,598)	$	1,240,996	$	(939)	$	1,043,634
Repurchase of common stock	—	—		—		(1,768)	(176,300)		—		—		(176,300)
Equity awards vested, net of shares withheld for taxes	127	1		(6,135)		—	—		—		—		(6,134)

Share-based compensation	—	—		10,318		—	—		—		—		10,318
Comprehensive income	—	—		—		—	—		84,110		146		84,256
Balance, March 31, 2023	50,236	$	502	$	505,857	(9,998)	$	(874,898)	$	1,325,106	$	(793)	$	955,774
Repurchase of common stock	—	—		(40,000)		(2,354)	(211,964)		—		—		(251,964)
Equity awards vested, net of shares withheld for taxes	103	1		(3,288)		—	—		—		—		(3,287)
Share-based compensation	—	—		4,818		—	—		—		—		4,818
Comprehensive income	—	—		—		—	—		60,906		50		60,956
Balance, June 30, 2023	50,339	$	503	$	467,387	(12,352)	$	(1,086,862)	$	1,386,012	$	(743)	$	766,297

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

AMN HEALTHCARE SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and in thousands)


	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net income	$	145,016	$	269,808
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (inclusive of depreciation included in cost of revenue)	77,068		64,757
Non-cash interest expense and other	1,038		953

Change in fair value of contingent consideration liabilities	2,430		580
Increase in allowance for credit losses and sales credits	29,432		13,803
Provision for deferred income taxes	(15,780)		3,421
Share-based compensation	15,136		19,772
Loss on disposal or impairment of long-lived assets	1,933		479

Net loss on investments in available-for-sale securities	155		536
Net gain on deferred compensation balances	(577)		(39)
Non-cash lease expense	(240)		3,542
Changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable	65,906		(3,535)
Accounts receivable, subcontractor	100,495		(7,988)
Income taxes receivable	8,875		(1,022)
Prepaid expenses	743		45,083
Other current assets	1,820		15,338
Other assets	894		1,002

Accounts payable and accrued expenses	(159,862)		29,461
Accrued compensation and benefits	(84,837)		73,349
Other liabilities	50,887		(104,729)

Deferred revenue	569		106

Net cash provided by operating activities	241,101		424,677

Cash flows from investing activities:
Purchase and development of fixed assets	(43,936)		(30,811)
Purchase of investments	—		(10,659)
Proceeds from sale and maturity of investments	6,987		9,085

Proceeds from sale of equity investment	—		68
Payments to fund deferred compensation plan	(17,910)		(12,584)

Cash paid for acquisitions, net of cash and restricted cash received	—		(69,801)
Cash paid for other intangibles	—		(1,060)

Net cash used in investing activities	(54,859)		(115,762)

Table of Contents

Nine Months Ended September 30,
2017 2016
Cash flows from operating activities:
Net income $ 91,391
$ 79,487
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 23,759
21,888
Non-cash interest expense and other 1,718
1,180
Change in fair value of contingent consideration 66
(88 )
Increase in allowances for doubtful accounts and sales credits 9,012
6,746
Provision for deferred income taxes (9,512 ) (3,209 )
Share-based compensation 7,720
8,795
Excess tax benefits from share-based compensation —
(2,764 )
Loss on disposal or sale of fixed assets 130
45
Amortization of discount on investments (112 ) —
Changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable (10,631 ) (42,594 )
Accounts receivable, subcontractor 12,033
8,681
Income taxes receivable (1,854 ) 6,160
Prepaid expenses (1,643 ) (195 )
Other current assets 10,155
(10,109 )
Other assets (5,204 ) (4,295 )
Accounts payable and accrued expenses (20,442 ) (791 )
Accrued compensation and benefits 3,991
10,761
Other liabilities (5,112 ) 5,736
Deferred revenue 678
256
Restricted cash, cash equivalents and investments balance (9,761 ) (870 )
Net cash provided by operating activities 96,382
84,820

Cash flows from investing activities:
Purchase and development of fixed assets (17,168 ) (17,705 )
Purchase of investments (11,021 ) —
Proceeds from maturity of investments 17,200
—
Change in restricted cash, cash equivalents and investments balance 601
—
Payments to fund deferred compensation plan (10,056 ) (5,665 )
Equity investment (2,000 ) —
Cash paid for acquisitions, net of cash received —
(216,553 )
Cash paid for working capital adjustments and holdback liability for prior year acquisitions (1,000 ) (1,348 )
Net cash used in investing activities (23,444 ) (241,271 )


	Six Months Ended June 30,
	2023		2022
Cash flows from financing activities:



Payments on revolving credit facility	(220,000)		—
Proceeds from revolving credit facility	410,000		—


Repurchase of common stock (1)	(424,744)		(401,891)
Payment of financing costs	(3,579)		—

Cash paid for shares withheld for taxes	(9,421)		(9,797)
Net cash used in financing activities	(247,744)		(411,688)

Net decrease in cash, cash equivalents and restricted cash	(61,502)		(102,773)
Cash, cash equivalents and restricted cash at beginning of period	137,872		246,714
Cash, cash equivalents and restricted cash at end of period	$	76,370	$	143,941

Supplemental disclosures of cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	4,929	$	7,922
Cash paid for interest (net of $658 and $254 capitalized for the six months ended June 30, 2023 and 2022, respectively)	$	22,652	$	18,887
Cash paid for income taxes	$	9,736	$	120,660
Acquisitions:
Fair value of tangible assets acquired in acquisitions, net of cash and restricted cash received	$	—	$	2,731
Goodwill	—		43,301
Intangible assets	—		40,200
Liabilities assumed	—		(8,431)


Contingent consideration liabilities	—		(8,000)
Net cash paid for acquisitions	$	—	$	69,801
Supplemental disclosures of non-cash investing and financing activities:
Purchase of fixed assets recorded in accounts payable and accrued expenses	$	10,928	$	7,562
Excise tax payable on share repurchases	$	3,520	$	—
Right-of-use assets obtained in exchange for operating lease liabilities	$	26,214	$	3,590

(1) The difference between the amount reported for the six months ended June 30, 2023 and the corresponding amounts presented in the condensed consolidated statements of stockholders’ equity is due to accrued excise tax payable on share repurchases recorded within treasury stock.

Nine Months Ended September 30,
2017 2016
Cash flows from financing activities:
Capital lease repayments —
(6 )
Payments on term loans (44,063 ) (8,438 )
Proceeds from term loans —
75,000
Payments on revolving credit facility —
(24,000 )
Proceeds from revolving credit facility —
124,000
Repurchase of common stock (7,097 ) —
Payment of financing costs —
(448 )
Earn-out payments for prior acquisitions (3,677 ) (900 )
Proceeds from termination of derivative contract 85
—
Cash paid for shares withheld for taxes (9,072 ) (5,554 )
Excess tax benefits from equity awards vested and exercised —
2,764
Net cash provided by (used in) financing activities (63,824 ) 162,418
Effect of exchange rate changes on cash (111 ) 165
Net increase in cash and cash equivalents 9,003
6,132
Cash and cash equivalents at beginning of period 10,622
9,576
Cash and cash equivalents at end of period $ 19,625
$ 15,708

Supplemental disclosures of cash flow information:
Cash paid for interest (net of $113 and $158 capitalized for the nine months ended September 30, 2017 and 2016, respectively) $ 9,395
$ 7,106
Cash paid for income taxes $ 65,998
$ 52,684
Acquisitions:
Fair value of tangible assets acquired in acquisitions, net of cash received $ —
$ 18,789
Goodwill —
136,521
Intangible assets —
89,064
Liabilities assumed —
(21,921 )
Holdback provision —
(1,830 )
Earn-out liabilities —
(4,070 )
Net cash paid for acquisitions $ —
$ 216,553
Supplemental disclosures of non-cash investing and financing activities:
Purchase of fixed assets recorded in accounts payable and accrued expenses $ 3,156
$ 1,370

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

AMN HEALTHCARE SERVICES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

1. BASIS OF PRESENTATION

The condensed consolidated balance sheets and related condensed consolidated statements of comprehensive income, stockholders’ equity and cash flows contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”), which are unaudited, include the accounts of AMN Healthcare Services, Inc. and its wholly-owned subsidiaries (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all entries necessary for a fair presentation of such unaudited condensed consolidated financial statements have been included. These entries consisted of all normal recurring items. The results of operations for the interim period are not necessarily indicative of the results to be expected for any other interim period or for the entire fiscal year or for any future period.

The unaudited condensed consolidated financial statements do not include all information and notes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United ~~States.~~States (“U.S. GAAP”). Please refer to the Company’s audited consolidated financial statements and the related notes for the fiscal year ended December 31, ~~2016,~~2022, contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016,~~2022, filed with the Securities and Exchange Commission on February ~~17, 2017 (“2016~~22, 2023 (the “2022 Annual Report”).

The preparation of financial statements in conformity with ~~accounting principles generally accepted in the United States~~U.S. GAAP requires management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, the Company evaluates its estimates, including those related to intangible assets purchased in a business combination, asset impairments, accruals for self-insurance, compensation and related benefits, accounts receivable, contingencies and litigation, ~~earn-out~~contingent consideration liabilities associated with acquisitions, and income taxes. Actual results could differ from those estimates under different assumptions or conditions.

Recently Adopted Accounting Pronouncements

In ~~March 2016,~~October 2021, the Financial Accounting Standards Board ~~(“FASB”)~~ issued Accounting Standards Update (“ASU”) ~~2016-09, “Stock Compensation - Improvements to Employee Share-Based Payment Accounting.~~2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” The new guidance ~~attempts~~requires companies to ~~simplify~~apply the ~~accounting for share-based payment transactions~~definition of a performance obligation under Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, to recognize and measure contract assets and contract liabilities, such as deferred revenue, relating to contracts with customers that are acquired in ~~several areas,~~a business combination. Under prior guidance, an acquirer generally recognized assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers, at their acquisition-date fair values in accordance with ASC Subtopic 820-10, Fair Value Measurements—Overall. Generally, this new guidance will result in the ~~following: income tax consequences, classification of awards as either equity or~~acquirer recognizing acquired contract assets and liabilities ~~forfeitures, expected term, and statement of cash flows classification.~~on the same basis that would have been recorded by the acquiree prior to the acquisition under ASC Topic 606. The Company adopted this ~~pronouncement prospectively beginning~~standard effective January 1, ~~2017. Accordingly, the prior period has not been adjusted~~2023 on a prospective basis, and the ~~primary effects of~~adoption did not have a material effect on the ~~adoption for the current period are as follows:~~Company’s consolidated financial statements.

Cash, Cash Equivalents and Restricted Cash

The Company ~~recorded $56~~considers all highly liquid investments and ~~$5,381~~restricted investments with an original maturity of ~~tax benefits within income tax expense~~three months or less to be cash equivalents and restricted cash equivalents, respectively. Cash and cash equivalents include currency on hand, deposits with financial institutions, money market funds and other highly liquid investments. Restricted cash and cash equivalents primarily includes cash, corporate bonds and commercial paper that serve as collateral for the ~~three~~Company’s captive insurance subsidiary claim payments. See Note (7), “Fair Value Measurement” for additional information.

The following table provides a reconciliation of cash, cash equivalents and ~~nine months ended September 30, 2017, respectively,~~restricted cash reported within the accompanying condensed consolidated balance sheets and related notes to the ~~excess tax benefit on share-based compensation. Prior to adoption, this amount would have been recorded as additional paid-in capital;~~amounts presented in the accompanying condensed consolidated statements of cash flows.

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	June 30, 2023		December 31, 2022
Cash and cash equivalents	$	7,013	$	64,524
Restricted cash and cash equivalents (included in other current assets)	15,992		37,225
Restricted cash, cash equivalents and investments	71,564		61,218
Total cash, cash equivalents and restricted cash and investments	94,569		162,967
Less restricted investments	(18,199)		(25,095)
Total cash, cash equivalents and restricted cash	$	76,370	$	137,872

The Company ~~continued to estimate the number of awards expected to be forfeited~~maintains its cash and restricted cash in ~~accordance with its existing accounting policy,~~bank deposit accounts primarily at large, national financial institutions, which ~~is to estimate forfeitures when recording share-based compensation expense;~~typically exceed federally insured limits. The Company has not experienced any losses in such accounts.

Accounts Receivable

The Company ~~excluded~~records accounts receivable at the ~~excess tax benefits from~~invoiced amount. Accounts receivable are non-interest bearing. The Company maintains an allowance for expected credit losses based on the ~~assumed proceeds~~Company’s historical write-off experience, an assessment of its customers’ financial conditions and available information that is relevant to ~~repurchase shares~~assessing the collectability of cash flows, which includes current conditions and forecasts about future economic conditions.

The following table provides a reconciliation of activity in the ~~computation of its diluted earnings per share~~allowance for credit losses for accounts receivable:


	2023		2022
Balance as of January 1,	$	31,910	$	6,838

Provision for expected credit losses	7,007		1,280
Amounts written off charged against the allowance	(2,516)		(596)

Balance as of June 30,	$	36,401	$	7,522

The increase in the provision for expected credit losses for the ~~three and nine~~six months ended ~~September~~June 30, ~~2017. The effect~~2023 was primarily the result of ~~this change on~~concern with a specific customer’s ability to meet its ~~diluted earnings per share was not significant;~~financial obligations, and

~~For~~ uncertainty regarding the ~~nine months ended September 30, 2017,~~collectability of cash flows ~~related to excess tax benefits were classified as an operating activity.~~

~~There were no other material impacts~~from customers due primarily to the ~~Company's~~current macroeconomic outlook.

Reclassifications

To conform to the current year presentation, certain reclassifications have been made to prior year balances in the condensed consolidated ~~financial statements as a result~~balance sheets and accompanying Note (10), “Balance Sheet Details.”

Table of ~~adopting this updated standard.~~Contents

2. ~~BUSINESS COMBINATIONS~~ACQUISITIONS

~~As set forth below, the Company completed three acquisitions during 2016.~~ The Company accounted for ~~each~~the acquisition set forth below using the acquisition method of accounting. Accordingly, itthe Company recorded the tangible and intangible assets acquired and liabilities assumed at their estimated fair values as of the ~~applicable~~ date of acquisition. ~~For each~~Since the date of acquisition, the Company has revised the allocation of the purchase price to the tangible and intangible assets acquired and liabilities assumed based on analysis of information that has been made available through June 30, 2023. The goodwill recognized for the acquisition is attributable to expected growth as the Company leverages its brand and diversifies its services offered to clients, including potential revenue growth and margin expansion. The Company did not incur any material acquisition-related costs.

~~Peak Provider Solutions~~Connetics Acquisition

On ~~June 3, 2016,~~May 13, 2022, the Company completed its acquisition of ~~Peak Provider Solutions~~Connetics Communications, LLC (“~~Peak”~~Connetics”), which ~~provides remote medical coding~~specializes in the direct hire recruitment and ~~consulting solutions to hospitals~~permanent placement of international nurse and ~~physician medical groups nationwide. The addition of Peak has expanded~~allied health professionals with healthcare facilities in the Company’s workforce solutions and enables the Company to offer services in coding diagnosis and procedure codes, which is critical to clinical quality reporting and the financial health of healthcare organizations.United States. The initial purchase price of ~~$52,125~~$78,764 included (1) ~~$51,645~~$70,764 cash consideration paid upon acquisition, funded through ~~cash-on-hand, net of~~ cash ~~received, and borrowings under the Company’s revolving credit facility,~~on hand, and (2) a contingent ~~earn-out payment~~consideration (earn-out payment) of up to ~~$3,000~~$12,500 with an estimated fair value of $480 as of the acquisition date. The contingent earn-out payment was based on the operating results of Peak for the year ending December 31, 2016, which resulted in no earn-out payment. As the acquisition was not considered significant, pro forma information has not been provided. The results of Peak have been included in the Company’s other workforce solutions segment since the date of acquisition. During the third quarter of 2016, an additional $275 of cash consideration was paid to the selling shareholders for the final working capital settlement.

The allocation of the $52,400 purchase price, which included the additional cash consideration paid for the final working capital settlement, consisted of (1) $5,658 of fair value of tangible assets acquired, (2) $9,346 of liabilities assumed, (3) $19,220 of identified intangible assets, and (4) $36,868 of goodwill, none of which is deductible for tax purposes. The fair value of intangible assets primarily includes $7,600 of trademarks and $11,500 of customer relationships with a weighted average useful life of approximately thirteen years.

~~HealthSource Global Staffing Acquisition~~

On January 11, 2016, the Company completed its acquisition of HealthSource Global Staffing (“HSG”), which provides labor disruption and rapid response staffing. The acquisition helps the Company expand its service lines and provide clients with rapid response staffing services. The initial purchase price of $8,511 included (1) $2,799 cash consideration paid upon acquisition, funded through cash-on-hand, net of cash received, and settlement of the pre-existing relationship between AMN and HSG, (2) $2,122 cash holdback for potential indemnification claims, and (3) a tiered contingent earn-out payment of up to $4,000 with an estimated fair value of $3,590$8,000 as of the acquisition date. The contingent earn-out payment is ~~comprised of (A) up to $2,000~~ based on the operating results of ~~HSG~~Connetics for the ~~year~~twelve months ending ~~December~~May 31, ~~2016, of which, $1,930 was~~2023 and expected to be paid in ~~March 2017, and (B) up to $2,000 based on~~ the ~~operating results~~third quarter of ~~HSG for the year ending December 31, 2017. As the acquisition was not considered significant, pro forma information has not been provided.~~2023. The results of ~~HSG~~Connetics have been included in the Company’s nurse and allied solutions segment since the date of acquisition. During the ~~third~~fourth quarter of ~~2016,~~2022, $231 was returned to the Company in respect of the final working capital ~~settlement resulted in $292 due from the selling shareholders to the Company, which was settled through a reduction to a cash holdback.~~settlement.

The allocation of the ~~$8,219~~$78,533 purchase price, which was reduced by the final working capital settlement and was finalized during the second quarter of 2023, consisted of (1) ~~$1,025~~$3,172 of fair value of tangible assets acquired, which included $963 cash received, (2) ~~$3,698~~$8,244 of liabilities assumed, (3) ~~$3,944~~$40,200 of identified intangible assets, and (4) ~~$6,948~~$43,405 of goodwill, ~~none~~ of which is deductible for tax purposes. The intangible assets include the fair value of trademarks, customer relationships, staffing databases, and covenants not to compete with a weighted average useful life of approximately eight years.

~~B.E. Smith Acquisition~~

On January 4, 2016, the Company completed its acquisition of B.E. Smith (“BES”), a full-service healthcare interim leadership placement and executive search firm, for $162,232 in cash, net of cash received, and settlement of the pre-existing relationship between AMN and BES. BES places interim leaders and executives across all healthcare settings, including acute care hospitals, academic medical and children’s hospitals, physician practices, and post-acute care providers. The acquisition provides the Company additional access to healthcare executives and enhances its integrated services to hospitals, health systems, and other healthcare facilities across the nation. To help finance the acquisition, the Company entered into the First Amendment to the Credit Agreement (the “First Amendment”), which provided $125,000 of additional available borrowings to the Company. The First Amendment was more fully described in “Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (8), Notes Payable and Credit Agreement” of our 2016 Annual Report. The results of BES have been included in the Company’s other workforce solutions segment since the date of acquisition. During the second quarter of 2016, $524 was returned to the Company for the final working capital settlement.

The allocation of the $161,708 purchase price, which was reduced by the final working capital settlement, consisted of (1) $11,953 of fair value of tangible assets acquired, (2) $7,272 of liabilities assumed, (3) $65,900 of identified intangible assets, and (4) $91,127 of goodwill, most of which$35,405 is deductible for tax purposes. The intangible assets acquired have a weighted average useful life of approximately ~~fifteen~~thirteen years. The following table summarizes the fair value and useful life of each intangible asset ~~acquired:~~acquired as of the acquisition date:


		Fair Value		Useful Life
				(in years)
Identifiable intangible assets
	Customer relationships	$	32,800	15
	Staffing database	4,200		5
	Tradenames and trademarks	3,200		5
		$	40,200

Fair Value Useful Life
(in years)
Identifiable intangible assets
Tradenames and Trademarks $ 26,300
20
Customer Relationships 25,700
12
Staffing Database 13,000
10
Non-Compete Agreements 900
5
$ 65,900

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3. REVENUE RECOGNITION

Revenue primarily consists of fees earned from the temporary staffing and permanent placement of healthcare professionals, executives, and ~~executives as well as~~leaders (clinical and operational). The Company also generates revenue from ~~the Company’s SaaS-based technology,~~technology-enabled services, including ~~its~~language interpretation and vendor management systems, and talent planning and acquisition services, including recruitment process outsourcing. The Company recognizes revenue when control of its ~~scheduling software.~~services is transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those services. Revenue from temporary staffing services is recognized as the services are rendered by ~~the~~clinical and non-clinical healthcare ~~professional or executive.~~professionals. Under the Company’s managed services program (“MSP”) arrangements, the Company manages all or a part of a customer’s supplemental workforce needs utilizing its own ~~pool~~network of healthcare professionals along with those of third-party subcontractors. Revenue and the related direct costs under MSP arrangements are recorded in accordance with the accounting guidance on reporting revenue gross as a principal versus net as an agent. When the Company uses subcontractors and acts as an agent, revenue is recorded net of the related subcontractor’s expense. ~~Payables to subcontractors of $38,167 and~~ ~~$51,973~~ ~~were included in accounts payable and accrued expenses in the unaudited condensed consolidated balance sheet as of~~ ~~September 30, 2017~~ ~~and the consolidated balance sheet as of~~ ~~December 31, 2016, respectively.~~ Revenue from ~~recruitment and~~ permanent placement and recruitment process outsourcing services is recognized as the services are ~~provided and upon successful placements. The~~rendered. Depending on the arrangement, the Company’s ~~SaaS-based~~technology-enabled service revenue is recognized either as the services are rendered or ratably over the applicable arrangement’s service period. ~~Fees~~

The Company’s customers are primarily billed as services are rendered. Any fees billed in advance of being earned are recorded as deferred revenue. While payment terms vary by the type of customer and the services rendered, the term between invoicing and when payment is due is not significant.

The Company has elected to apply the following practical expedients and optional exemptions related to contract costs and revenue recognition:

•Recognize incremental costs of obtaining a contract with amortization periods of one year or less as expense when incurred. These costs are recorded within selling, general and administrative expenses.

•Recognize revenue in the amount of consideration that the Company has a right to invoice the customer if that amount corresponds directly with the value to the customer of the Company’s services completed to date.

•Exemptions from disclosing the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts for which revenue is recognized in the amount of consideration that the Company has a right to invoice for services performed and (iii) contracts for which variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation.

See Note (5), “Segment Information,” for additional information regarding the Company’s revenue disaggregated by service type.

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4. NET INCOME PER COMMON SHARE

Basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period. The following table sets forth the computation of basic and diluted net income per common ~~share for the three months and nine months ended September 30, 2017 and~~ ~~2016, respectively:~~share:


	Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016			2023		2022		2023		2022
Net income	$	28,128	$	27,296	$	91,391	$	79,487	Net income	$	60,906	$	123,800	$	145,016	$	269,808

Net income per common share - basic	$	0.59	$	0.57	$	1.91	$	1.66	Net income per common share - basic	$	1.56	$	2.78	$	3.60	$	5.90
Net income per common share - diluted	$	0.57	$	0.55	$	1.85	$	1.61	Net income per common share - diluted	$	1.55	$	2.77	$	3.58	$	5.87

Weighted average common shares outstanding - basic	47,912		48,049		47,870		47,993		Weighted average common shares outstanding - basic	39,151		44,504		40,258		45,702
Plus dilutive effect of potential common shares	1,533		1,361		1,610		1,294		Plus dilutive effect of potential common shares	190		236		196		270
Weighted average common shares outstanding - diluted	49,445		49,410		49,480		49,287		Weighted average common shares outstanding - diluted	39,341		44,740		40,454		45,972

Share-based awards to purchase 1078 and 14227 shares of common stock were not included in the above calculation of diluted net income per common share for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, respectively, because the effect of these instruments was anti-dilutive. Share-based awards to purchase 1160 and 1848 shares of common stock were not included in the above calculation of diluted net income per common share for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016~~2022, respectively, because the effect of these instruments was anti-dilutive.

Accelerated Share Repurchase

On May 8, 2023, the Company entered into an accelerated share repurchase (“ASR”) agreement with a counterparty whereupon the Company prepaid $200,000 and received an initial delivery of 1,760 shares of its common stock, which was 80% of the prepayment amount based on a price of $90.89 per share. Under the terms of the ASR, the total number of shares delivered and average price per share will be determined upon settlement based on the volume weighted average price over the term of the ASR agreement, less an agreed upon discount and subject to customary acceleration adjustments. At settlement, the Company may receive additional shares of its common stock or, under certain circumstances, the Company may be required to make a cash payment or deliver shares of its common stock to the counterparty, with the method of settlement at the Company’s election. The final settlement of the ASR will be completed no later than the fourth quarter of 2023, subject to acceleration at the counterparty’s discretion, which could be completed as early as the third quarter of 2023.

During the three months ended June 30, 2023, the prepayment was recognized as a reduction to stockholders’ equity, consisting of (1) an increase in treasury stock, which reflects the fair value of the shares received upon initial delivery, and (2) a reduction in additional paid-in capital, which reflects the pending settlement of the ASR agreement. The effect of the potential share settlement of the ASR agreement was not included in the calculation of diluted net income per common share for the three and six months ended June 30, 2023 because the effect was anti-dilutive.

5. SEGMENT INFORMATION

The Company’s operating segments are identified in the same manner as they are reported internally and used by the Company’s chief operating decision maker for the purpose of evaluating performance and allocating resources. The Company has three reportable segments: (1) nurse and allied solutions, (2) physician and leadership solutions, and (3) technology and workforce solutions. The nurse and allied solutions segment includes the Company’s travel nurse staffing (including international nurse staffing and rapid response nurse staffing), labor disruption staffing, local staffing, international nurse and allied permanent placement, allied staffing and revenue cycle solutions businesses. The physician and leadership solutions segment includes the Company’s locum tenens staffing, healthcare interim leadership staffing, executive search, and physician permanent placement businesses. The technology and workforce solutions segment includes the Company’s language services, vendor management systems, workforce optimization, virtual care, and ~~other workforce solutions.~~outsourced solutions businesses.

The Company’s chief operating decision maker relies on internal management reporting processes that provide revenue and operating income by reportable segment for making financial decisions and allocating resources. Segment operating income represents income before income taxes plus depreciation, amortization of intangible assets, share-based compensation, interest expense, net, and other, and unallocated corporate overhead. The Company’s management does not evaluate, manage or measure performance of segments using asset information; accordingly, asset information by segment is not prepared or disclosed.

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The following table provides a reconciliation of revenue and operating income by reportable segment to consolidated results and was derived from each segment’s internal financial information as used for corporate management purposes:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenue
Nurse and allied solutions	$	689,015	$	1,101,478	$	1,513,495	$	2,329,517
Physician and leadership solutions	176,229		175,697		341,986		355,203
Technology and workforce solutions	126,055		149,432		262,041		294,425
	$	991,299	$	1,426,607	$	2,117,522	$	2,979,145
Segment operating income
Nurse and allied solutions	$	102,993	$	160,870	$	216,438	$	355,959
Physician and leadership solutions	26,456		19,995		51,556		40,376
Technology and workforce solutions	55,623		82,501		122,633		161,381
	185,072		263,366		390,627		557,716
Unallocated corporate overhead	50,357		38,073		81,090		81,721
Depreciation and amortization	36,847		32,274		74,424		62,930
Depreciation (included in cost of revenue)	1,387		973		2,644		1,827
Share-based compensation	4,818		8,513		15,136		19,772
Interest expense, net, and other	12,175		10,080		22,434		19,669
Income before income taxes	$	79,488	$	173,453	$	194,899	$	371,797

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Revenue
Nurse and allied solutions $ 302,933
$ 286,810
$ 917,183
$ 877,197
Locum tenens solutions 111,415
108,553
322,473
320,420
Other workforce solutions 80,058
77,273
239,722
216,750
$ 494,406
$ 472,636
$ 1,479,378
$ 1,414,367
Segment operating income
Nurse and allied solutions $ 40,807
$ 37,396
$ 134,638
$ 118,517
Locum tenens solutions 14,438
14,026
39,028
43,634
Other workforce solutions 19,890
20,867
61,788
56,311
75,135
72,289
235,454
218,462
Unallocated corporate overhead 13,698
15,113
44,732
45,908
Depreciation and amortization 8,132
7,789
23,759
21,888
Share-based compensation 2,477
2,704
7,720
8,795
Interest expense, net, and other 4,837
3,016
14,895
9,065
Income before income taxes $ 45,991
$ 43,667
$ 144,348
$ 132,806

The following table summarizes the activity related to the carrying value of goodwill by reportable segment:


	Nurse and Allied Solutions		Physician and Leadership Solutions		Technology and Workforce Solutions		Total
Balance, January 1, 2023	$	382,005	$	152,800	$	400,559	$	935,364


Goodwill adjustment for Connetics acquisition	415		—		—		415

Balance, June 30, 2023	$	382,420	$	152,800	$	400,559	$	935,779
Accumulated impairment loss as of December 31, 2022 and June 30, 2023	$	154,444	$	60,495	$	—	$	214,939

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Disaggregation of Revenue

The following tables present the Company’s revenue disaggregated by service type:


	Three Months Ended June 30, 2023
	Nurse and Allied Solutions		Physician and Leadership Solutions		Technology and Workforce Solutions		Total
Travel nurse staffing	$	477,209	$	—	$	—	$	477,209
Labor disruption services	5,036		—		—		5,036
Local staffing	18,775		—		—		18,775
Allied staffing	182,212		—		—		182,212
Locum tenens staffing	—		121,912		—		121,912
Interim leadership staffing	—		36,401		—		36,401
Temporary staffing	683,232		158,313		—		841,545
Permanent placement	5,783		17,916		—		23,699
Language services	—		—		63,650		63,650
Vendor management systems	—		—		46,554		46,554
Other technologies	—		—		5,792		5,792
Technology-enabled services	—		—		115,996		115,996
Talent planning and acquisition	—		—		10,059		10,059
Total revenue	$	689,015	$	176,229	$	126,055	$	991,299


	Three Months Ended June 30, 2022
	Nurse and Allied Solutions		Physician and Leadership Solutions		Technology and Workforce Solutions		Total
Travel nurse staffing	$	775,668	$	—	$	—	$	775,668
Labor disruption services	83,070		—		—		83,070
Local staffing	33,394		—		—		33,394
Allied staffing	207,309		—		—		207,309
Locum tenens staffing	—		105,936		—		105,936
Interim leadership staffing	—		47,606		—		47,606
Temporary staffing	1,099,441		153,542		—		1,252,983
Permanent placement	2,037		22,155		—		24,192
Language services	—		—		53,291		53,291
Vendor management systems	—		—		75,144		75,144
Other technologies	—		—		6,839		6,839
Technology-enabled services	—		—		135,274		135,274
Talent planning and acquisition	—		—		14,158		14,158
Total revenue	$	1,101,478	$	175,697	$	149,432	$	1,426,607

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	Six Months Ended June 30, 2023
	Nurse and Allied Solutions		Physician and Leadership Solutions		Technology and Workforce Solutions		Total
Travel nurse staffing	$	1,069,886	$	—	$	—	$	1,069,886
Labor disruption services	10,738		—		—		10,738
Local staffing	44,047		—		—		44,047
Allied staffing	378,337		—		—		378,337
Locum tenens staffing	—		228,615		—		228,615
Interim leadership staffing	—		76,643		—		76,643
Temporary staffing	1,503,008		305,258		—		1,808,266
Permanent placement	10,487		36,728		—		47,215
Language services	—		—		125,326		125,326
Vendor management systems	—		—		100,727		100,727
Other technologies	—		—		13,139		13,139
Technology-enabled services	—		—		239,192		239,192
Talent planning and acquisition	—		—		22,849		22,849
Total revenue	$	1,513,495	$	341,986	$	262,041	$	2,117,522


	Six Months Ended June 30, 2022
	Nurse and Allied Solutions		Physician and Leadership Solutions		Technology and Workforce Solutions		Total
Travel nurse staffing	$	1,745,777	$	—	$	—	$	1,745,777
Labor disruption services	83,070		—		—		83,070
Local staffing	77,451		—		—		77,451
Allied staffing	421,182		—		—		421,182
Locum tenens staffing	—		218,608		—		218,608
Interim leadership staffing	—		91,960		—		91,960
Temporary staffing	2,327,480		310,568		—		2,638,048
Permanent placement	2,037		44,635		—		46,672
Language services	—		—		102,529		102,529
Vendor management systems	—		—		150,166		150,166
Other technologies	—		—		14,497		14,497
Technology-enabled services	—		—		267,192		267,192
Talent planning and acquisition	—		—		27,233		27,233
Total revenue	$	2,329,517	$	355,203	$	294,425	$	2,979,145

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6. NOTES PAYABLE AND CREDIT AGREEMENT

Nurse and Allied Solutions Locum Tenens Solutions Other Workforce Solutions Total
Balance, January 1, 2017 $ 104,306
$ 19,743
$ 217,705
$ 341,754
Goodwill adjustment for HSG acquisition (1,199 ) —
—
(1,199 )
Goodwill adjustment for Peak acquisition —
—
41
41
Balance, September 30, 2017 $ 103,107
$ 19,743
$ 217,746
$ 340,596
Accumulated impairment loss as of December 31, 2016 and September 30, 2017 $ 154,444
$ 53,940
$ 6,555
$ 214,939
On February 10, 2023, the Company entered into the third amendment to its credit agreement (the “Third Amendment”). The Third Amendment provides for, among other things, the following: (i) an extension of the maturity date of the secured revolving credit facility (the “Senior Credit Facility”) to February 10, 2028, (ii) an increase of the revolving commitments to $750,000, and (iii) a transition from LIBOR to a SOFR-based interest rate. The obligations of the Company under the amended credit agreement are secured by substantially all of the assets of the Company. Additional information regarding the credit agreement, Senior Credit Facility and Third Amendment is disclosed in Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (8), Notes Payable and Credit Agreement” of the 2022 Annual Report.

7. FAIR VALUE MEASUREMENT

The Company’s valuation techniques and inputs used to measure fair value and the definition of the three levels (Level 1, Level 2, and Level 3) of the fair value hierarchy are disclosed in Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note 4—(3), Fair Value Measurement” of the ~~2016~~2022 Annual Report. The Company has not changed the valuation techniques or inputs it uses for its fair value measurement during the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2023.

Assets and Liabilities Measured on a Recurring Basis

The ~~Company’s restricted~~Company invests a portion of its cash and cash equivalents ~~that serve as collateral for the Company’s outstanding letters of credit~~

~~typically consist of~~in non-federally insured money market funds that are measured at fair value based on quoted prices, which are Level 1 inputs.

The Company has a deferred compensation plan for certain executives and employees, which is composed of deferred compensation and all related income and losses attributable thereto. The Company’s obligation under its deferred compensation plan is measured at fair value based on quoted market prices of the participants’ elected investments, which are Level 1 inputs.

The Company’s restricted cash equivalents and investments that serve as collateral for the Company’s captive insurance company ~~primarily consist of~~include commercial paper ~~that~~and corporate bonds. The commercial paper is measured at observable market prices for identical securities that are traded in less active markets, which are Level 2 inputs. OfThe corporate bonds are measured using readily available pricing sources that utilize observable market data, including the ~~$28,538~~current interest rate for comparable instruments, which are Level 2 inputs. The following table presents the fair value of commercial paper and corporate bonds issued and outstanding as of September 30, 2017, $5,076 had original maturities greater than three months, which were considered available-for-sale securities. As of December 31, 2016, the Company had $25,610 commercial paper issued and outstanding, of which $11,152 had original maturities greater than three months and were considered available-for-sale securities.outstanding:


	As of June 30, 2023		As of December 31, 2022
Commercial paper	$	40,495	$	31,536
Corporate bonds	—		—
Total classified as restricted cash equivalents	$	40,495	$	31,536
Commercial paper	$	—	$	—
Corporate bonds	18,199		25,095
Total classified as restricted investments	$	18,199	$	25,095

The Company’s ~~interest rate swap was~~contingent consideration liabilities associated with acquisitions are measured at fair value using a discounted cash flow analysis that includes the contractual terms, including the period to maturity, and Level 2 observable market-based inputs, including interest rate curves. The fair value of the swap was determined by netting the discounted future fixed cash receipts payments and the discounted expected variable cash receipts. The variable cash receipts were based on an expectation of future interest rates (forward curves) derived from observable market interest rate yield curves. The valuation also considered credit risk adjustments that were necessary to reflect the probability of default by the counterparty or the Company, which were considered Level 3 inputs. On May 3, 2017, the Company terminated the remaining interest rate swap.

~~The Company’s contingent consideration liabilities are measured at fair value using~~ probability-weighted discounted cash flow analysis or a simulation-based methodology for the acquired companies, which are Level 3 inputs. The Company recognizes changes to the fair value of its contingent consideration liabilities in selling, general and administrative expenses in the condensed consolidated statements of comprehensive income.

The following ~~tables present~~table presents information about the above-referenced assets and liabilities and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value:

Table of Contents


												Fair Value Measurements as of June 30, 2023								Fair Value Measurements as of December 31, 2022
	Fair Value Measurements as of September 30, 2017
	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets (Liabilities)											Assets (Liabilities)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Money market funds	$	4,026		$	4,026	$	—	$	—		Money market funds	$	649	$	—	$	—	$	649	$	36,895	$	—	$	—	$	36,895
Deferred compensation											Deferred compensation	(150,339)		—		—		(150,339)		(128,465)		—		—		(128,465)
Corporate bonds											Corporate bonds	—		18,199		—		18,199		—		25,095		—		25,095
Commercial paper	28,538			—		28,538		—			Commercial paper	—		40,495		—		40,495		—		31,536		—		31,536
Acquisition contingent consideration earn-out liabilities	(1,952		)	—		—		(1,952		)
Acquisition contingent consideration liabilities											Acquisition contingent consideration liabilities	—		—		(7,500)		(7,500)		—		—		(5,070)		(5,070)

Fair Value Measurements as of December 31, 2016
Total
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)
Money market funds $ 4,627
$ 4,627
$ —
$ —
Commercial paper 25,610
—
25,610
—
Interest rate swap asset 24
—
24
—
Acquisition contingent consideration earn-out liabilities (6,816 ) —
—
(6,816 )

~~Level 3 Information~~

~~The following table sets forth a reconciliation of changes in the fair value of contingent consideration liabilities classified as Level 3 in the fair value hierarchy:~~

Three Months Ended September 30,
2017 2016
Balance as of July 1, $ (1,932 )
$ (7,054 )
Change in fair value of contingent consideration earn-out liability from Peak acquisition —
480
Change in fair value of contingent consideration earn-out liability from TFS acquisition —
(94 )
Change in fair value of contingent consideration earn-out liability from HSG acquisition (20 ) (84 )
Balance as of September 30, $ (1,952 ) $ (6,752 )

Nine Months Ended September 30,
2017 2016
Balance as of January 1, $ (6,816 ) $ (3,770 )
Settlement of TFS earn-out for year ended December 31, 2015 —
1,000
Contingent consideration earn-out liability from HSG acquisition on January 11, 2016 —
(3,590 )
Contingent consideration earn-out liability from Peak acquisition on June 3, 2016 —
(480 )
Change in fair value of contingent consideration earn-out liability from Avantas acquisition —
660
Change in fair value of contingent consideration earn-out liability from TFS acquisition —
(859 )
Change in fair value of contingent consideration earn-out liability from HSG acquisition (66 ) (193 )
Change in fair value of contingent consideration earn-out liability from Peak acquisition —
480
Settlement of TFS earn-out for year ended December 31, 2016 3,000
—
Settlement of HSG earn-out for year ended December 31, 2016 1,930
—
Balance as of September 30, $ (1,952 ) $ (6,752 )

Assets Measured on a Non-Recurring Basis

The Company applies fair value techniques on a non-recurring basis associated with valuing potential impairment losses related to its goodwill, ~~indefinite-lived intangible assets,~~ long-lived assets, and equity investments.

The Company evaluates goodwill and indefinite-lived intangible assets annually for impairment and whenever events or changes in circumstances ~~occur indicating~~indicate that ~~goodwill might be impaired.~~it is more likely than not that an impairment exists. The Company determines the fair value of its reporting units based on a combination of inputs, including the market capitalization of the Company, as well as Level 3 inputs such as discounted cash flows, which are not observable from the market, directly or indirectly. The Company determines the fair value of its indefinite-lived intangible assets using the income approach (relief-from-royalty method) based on Level 3 inputs.

The Company’s equity investment represents an investment in a non-controlled corporation without a readily determinable market value. The Company has elected to measure the investment at cost minus impairment, if any, plus or minus changes resulting from observable price changes. The fair value is determined by using quoted prices for identical or similar investments of the same issuer, which are Level 2 inputs, and other information available to the Company such as the rights and obligations of the securities. The Company recognizes changes to the fair value of its equity investment in interest expense, net, and other in the condensed consolidated statements of comprehensive income. The balance of the equity investment was $19,204 as of both June 30, 2023 and December 31, 2022.

There were no ~~triggering events identified and no indication of~~material impairment ~~of the Company’s goodwill, indefinite-lived intangible assets, long-lived assets, or equity investments~~charges recorded during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016.~~2022.

Fair Value of Financial Instruments

The ~~carrying amount~~Company is required to disclose the fair value of financial instruments for which it is practicable to estimate the value, even though these instruments are not recognized at fair value in the consolidated balance sheets. The fair value of the Company’s 4.625% senior notes ~~approximate their fair values. The~~due 2027 (the “2027 Notes”) and 4.000% senior notes ~~were issued~~due 2029 (the “2029 Notes”) was estimated using quoted market prices in ~~October 2016~~active markets for identical liabilities, which are Level 1 inputs. The carrying amounts and ~~have a fixed rate~~estimated fair value of ~~5.125%. There have been no changes~~the 2027 Notes and the 2029 Notes are presented in ~~available rates for similar debt since~~ the ~~date of issuance.~~following table. See additional information regarding the 2027 Notes and the 2029 Notes in ~~“Item 8. Financial~~Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (8), Notes Payable and Credit Agreement” of ~~our 2016~~the 2022 Annual Report.


	As of June 30, 2023				As of December 31, 2022
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
2027 Notes	$	500,000	$	461,250	$	500,000	$	460,000
2029 Notes	350,000		305,375		350,000		300,125

The fair value of the Company’s long-term self-insurance accruals cannot be estimated as the Company cannot reasonably determine the timing of future payments.

7.8. INCOME TAXES

The Company is subject to taxation in the U.S. and various states and foreign jurisdictions. With few exceptions, as of ~~September~~June 30, ~~2017,~~2023, the Company is no longer subject to state, local or foreign examinations by tax authorities for tax years before ~~2006,~~2011, and the Company is no longer subject to U.S. federal income or payroll tax examinations for tax years before 2011. The Company’s tax years 2007, 2008, 2009 and 2010 had been under audit by the Internal Revenue Service (“IRS”) for several years and in 2014, the IRS issued the Company its Revenue Agent Report (“RAR”) and an Employment Tax Examination Report (“ETER”). The RAR proposed adjustments to the Company’s taxable income for 2007-2010 and net operating loss carryforwards for 2005 and 2006, resulting from the proposed disallowance2019.

Table of certain per diems paid to the Company’s healthcare professionals, and the ETER proposed assessments for additional payroll tax liabilities and penalties for tax years 2009 and 2010 related to the Company’s treatment of certain non-taxable per diem allowances and travel benefits. The positions in the RAR and ETER were mutually exclusive, and contained multiple tax positions, some of which were contrary to each other. The Company filed a Protest Letter for both the RAR and ETER positions in 2014 and the Company received a final determination from the IRS in July 2015 on both the RAR adjustments and ETER assessments, effectively settling these audits with the IRS for $7,200 (including interest) during the third quarter of 2015. As a result of the settlement, the Company recorded federal income tax benefits of approximately $12,200 during the quarter ended September 30, 2015, state income tax benefits (net of federal tax impact) of $568 for the year ended December 31, 2016, and expects to record state income tax benefits (net of federal tax impact) of approximately $1,200 by fiscal year 2019, when the various state statutes are projected to lapse.Contents

The IRS conducted and completed a separate audit of the Company’s 2011 and 2012 tax years that focused on income and employment tax issues similar to those raised in the 2007 through 2010 examination. The IRS completed its audit during the quarter ended March 31, 2015, and issued its RAR and ETER to the Company with proposed adjustments to the Company’s taxable income for 2011 and 2012 and net operating loss carryforwards from 2010 and assessments for additional payroll tax liabilities and penalties for 2011 and 2012 related to the Company’s treatment of certain non-taxable per diem allowances and travel benefits. The positions in the RAR and ETER for the 2011 and 2012 years are mutually exclusive and contain multiple tax positions, some of which are contrary to each other. The Company filed a Protest Letter for both the RAR and ETER in April 2015 and the matter is currently at IRS Appeals. The Company has been meeting and working with the IRS Appeals office and anticipates a resolution within the next twelve months. The IRS began an audit of the Company’s 2013 tax year during the quarter ended June 30, 2015. The Company believes its ~~reserve~~liability for unrecognized tax benefits and contingent tax issues is adequate with respect to all open years. Notwithstanding the foregoing, the Company could adjust its provision for income taxes and contingent tax liability based on future developments.

8.9. COMMITMENTS AND ~~CONTINGENCIES: LEGAL~~CONTINGENCIES

Legal Proceedings

From time to time, the Company is involved in various lawsuits, claims, investigations, and proceedings that arise in the ordinary course of business. These matters typically relate to professional liability, tax, ~~payroll,~~compensation, contract, competitor disputes and employee-related matters and include individual and ~~collective~~class action lawsuits, as well as inquiries and investigations by governmental agencies regarding the Company’s employment and compensation practices. Additionally, some of the Company’s clients may also become subject to claims, governmental inquiries and investigations, and legal actions relating to services provided by the Company’s healthcare professionals. Depending upon the particular facts and circumstances, the Company may also be subject to indemnification obligations under its contracts with such clients relating to these matters. The Company accrues for contingencies and records a liability when management believes an adverse outcome from a loss contingency is both probable and the amount, or a range, can be reasonably estimated. Significant judgment is required to determine both probability of loss and the estimated amount. The Company reviews its loss contingencies at least quarterly and adjusts its accruals and/or disclosures to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, or other new information, as deemed necessary. The most significant

matters for which the Company has established loss contingencies are class actions related to wage and hour claims under California and Federal law. Specifically, among other claims in these lawsuits, it is alleged that certain expense reimbursements should be considered wages and included in the regular rate of pay for purposes of calculating overtime rates.

On May 26, 2016, former travel nurse Verna Maxwell Clarke filed a complaint against AMN Services, LLC, in California Superior Court in Los Angeles County. The Company removed the case to the United States District Court for the Central District of California (Case No. 2:16-cv-04132-DSF-KS) (the “Clarke Matter”). The complaint asserts that, due to the Company’s per diem adjustment practices, traveling nurses’ per diem benefits should be included in their regular rate of pay for the purposes of calculating their overtime compensation. On June 26, 2018, the district court denied the plaintiffs’ Motion for Summary Judgment in its entirety, and granted the Company’s Motion for Summary Judgment with respect to the plaintiffs’ per diem and overtime claims. ~~Management currently believes~~The plaintiffs filed an appeal of the ~~probable loss related~~judgment relating to ~~these wage~~the per diem claims with the Ninth Circuit Court of Appeals (the “Ninth Circuit”). On February 8, 2021, the Ninth Circuit issued an opinion that reversed the district court’s granting of the Company’s Motion for Summary Judgment and ~~hour claims is not material and~~remanded the ~~amount accrued by~~matter to the district court instructing the district to enter partial summary judgment in favor of the plaintiffs. On August 26, 2021, the Company filed a Petition for ~~such claims~~Writ of Certiorari in the United States Supreme Court seeking review of the Ninth Circuit’s decision, which was denied on December 13, 2021. The Company has reached an agreement to settle this matter in its entirety and is awaiting court approval. Accordingly, the Company has recorded an accrual for this matter amounting to $62,000.

On May 2, 2019, former travel nurse Sara Woehrle filed a complaint against AMN Services, LLC, and Providence Health System – Southern California in California Superior Court in Los Angeles County. The Company removed the case to the United States District Court for the Central District of California (Case No. 2:19-cv-05282 DSF-KS). The complaint asserts that, due to the Company’s per diem adjustment practices, traveling nurses’ per diem benefits should be included in their regular rate of pay for the purposes of calculating their overtime compensation. The complaint also alleges that the putative class members were denied required meal periods, denied proper overtime compensation, were not ~~material~~compensated for all time worked, including reporting time and training time, and received non-compliant wage statements. The Company reached an agreement to settle this matter in its entirety and received court approval of the settlement. Payment was made in the second quarter of 2023.

Loss contingencies accrued as of ~~September~~both June 30, ~~2017. However, losses ultimately incurred for such claims could materially differ from amounts already accrued by the Company.~~

~~With regards to outstanding loss contingencies as of September 30, 2017, which~~2023 and December 31, 2022 are included in accounts payable and accrued expenses and other long-term liabilities in the consolidated balance ~~sheet,~~sheets.

Operating Leases

In the first quarter of 2022, the Company ~~believes that such matters will not, either individually or~~entered into a lease agreement for an office building located in Dallas, Texas, with future undiscounted lease payments of approximately $29,514, excluding lease incentives. The lease commenced upon substantial completion of the ~~aggregate, have~~construction of the office building in June 2023. The initial term of the lease is approximately eleven years with options to renew during the lease term. The Company recognized a ~~material adverse effect on its business, consolidated financial position, results~~right-of-use asset and operating lease liability of ~~operations, or cash flows.~~$15,782 and $22,713, respectively, at lease commencement, which reflects the utilization of a tenant improvement allowance of $6,931 accounted for as a lease incentive.

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9.10. BALANCE SHEET DETAILS

The consolidated balance sheets detail is as ~~follows as~~follows:


	June 30, 2023		December 31, 2022
Other current assets:
Restricted cash and cash equivalents	$	15,992	$	37,225
Income taxes receivable	—		8,875
Other	18,109		19,937
Other current assets	$	34,101	$	66,037






Fixed assets:
Furniture and equipment	$	61,042	$	51,408
Software	353,379		323,418
Leasehold improvements	13,146		2,067
	427,567		376,893
Accumulated depreciation	(250,150)		(227,617)
Fixed assets, net	$	177,417	$	149,276

Other assets:
Life insurance cash surrender value	$	148,089	$	117,139
Operating lease right-of-use assets	30,080		16,266
Other	41,612		38,611
Other assets	$	219,781	$	172,016

Accounts payable and accrued expenses:
Trade accounts payable	$	54,531	$	78,057
Subcontractor payable	168,090		295,259
Accrued expenses	78,332		73,885
Loss contingencies	10,976		14,638
Professional liability reserve	7,652		7,756
Other	7,957		6,857
Accounts payable and accrued expenses	$	327,538	$	476,452

Accrued compensation and benefits:
Accrued payroll	$	55,662	$	63,857
Accrued bonuses and commissions	28,113		96,760


Workers compensation reserve	12,294		12,113
Deferred compensation	150,339		128,465
Other	15,221		32,049
Accrued compensation and benefits	$	261,629	$	333,244

Other current liabilities:
Acquisition related liabilities	$	7,500	$	5,070
Income taxes payable	46,675		—
Client deposits	1,938		21,466
Operating lease liabilities	8,603		8,090
Deferred revenue	12,390		11,825
Other	7,442		1,786
Other current liabilities	$	84,548	$	48,237

Other long-term liabilities:
Workers compensation reserve	$	22,593	$	23,841
Professional liability reserve	37,290		36,214

Operating lease liabilities	30,233		9,360


Other	72,932		51,151
Other long-term liabilities	$	163,048	$	120,566

Table of ~~September 30, 2017 and December 31, 2016:~~

Contents

September 30, 2017 December 31, 2016
Other current assets:
Restricted cash and cash equivalents $ 16,215
$ 20,271
Other 10,005
14,336
Other current assets $ 26,220
$ 34,607

Fixed assets:
Furniture and equipment $ 28,202
$ 25,582
Software 126,492
112,405
Leasehold improvements 8,025
6,832
162,719
144,819
Accumulated depreciation (94,531 ) (84,865 )
Fixed assets, net $ 68,188
$ 59,954

Other assets:
Life insurance cash surrender value $ 45,835
$ 32,190
Other 28,127
25,344
Other assets $ 73,962
$ 57,534

Accounts payable and accrued expenses:
Trade accounts payable $ 24,166
$ 33,392
Subcontractor payable 38,167
51,973
Accrued expenses 45,690
37,251
Professional liability reserve 7,048
10,254
Other 2,863
4,642
Accounts payable and accrued expenses $ 117,934
$ 137,512

Accrued compensation and benefits:
Accrued payroll $ 31,840
$ 30,917
Accrued bonuses 16,755
26,992
Accrued travel expense 3,488
2,972
Accrued health insurance reserve 3,708
3,189
Accrued workers compensation reserve 8,301
8,406
Deferred compensation 45,771
32,690
Other 2,121
2,827
Accrued compensation and benefits $ 111,984
$ 107,993

Other current liabilities:
Acquisition related liabilities $ 2,981
$ 6,921
Other 2,459
9,690
Other current liabilities $ 5,440
$ 16,611

Other long-term liabilities:
Workers’ compensation reserve $ 18,475
$ 18,708
Professional liability reserve 40,033
37,338
Deferred rent 14,602
13,274
Unrecognized tax benefits 7,240
8,464
Other 2,323
4,312
Other long-term liabilities $ 82,673
$ 82,096

Item 2. Management’s Discussion and Analysis of Financial Condition and Results

of Operations

The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto and other financial information included elsewhere herein and in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016,~~2022, filed with the Securities and Exchange Commission (“SEC”) on February ~~17, 2017~~22, 2023 (“~~2016~~2022 Annual Report”). Certain statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are “forward-looking statements.” See “Special Note Regarding Forward-Looking Statements.” We undertake no obligation to update the forward-looking statements in this Quarterly Report. References in this Quarterly Report to “AMN Healthcare,” the “Company,” “we,” “us” and “our” refer to AMN Healthcare Services, Inc. and its wholly owned subsidiaries.

Overview of Our Business

We provide healthcare workforce solutions and staffing services to healthcare ~~facilities~~organizations across the nation. As an innovative ~~workforce~~total talent solutions partner, our managed services programs, or “MSP,” vendor management systems, or “VMS,” ~~recruitment process outsourcing, or “RPO,”~~ workforce ~~optimization~~consulting services, ~~medical coding and consulting~~predictive modeling, staff scheduling, revenue cycle solutions, language services, and the placement of physicians, nurses, allied healthcare professionals and healthcare ~~executives~~leaders into temporary and permanent positions enable our clients to successfully reduce staffing complexity, increase efficiency and lead their organizations within the rapidly evolving healthcare environment. Our clients include acute and sub-acute care hospitals, community health centers and clinics, physician practice groups, retail and urgent care centers, home health facilities, and many other healthcare settings. Our clients utilize our workforce solutions and healthcare staffing services to strategically plan for and meet their workforce needs in an economically beneficial manner. Our managed services program and vendor management systems enable healthcare organizations to increase their efficiency by managing all of their supplemental workforce needs through one company or technology.

We conduct business through three reportable segments: (1) nurse and allied solutions, (2) ~~locum tenens~~physician and leadership solutions, and (3) ~~other~~technology and workforce solutions. For the three months ended ~~September~~June 30, ~~2017,~~2023, we recorded revenue of ~~$494.4~~$991.3 million, as compared to ~~$472.6~~$1,426.6 million for the same period last year. For the ~~three~~six months ended ~~September~~June 30, ~~2017,~~2023, we recorded ~~net income~~revenue of ~~$28.1~~$2,117.5 million, as compared to $27.3 million for the same period last year. For the nine months ended September 30, 2017, we recorded revenue of $1,479.4 million, as compared to $1,414.4 million for the same period last year. For the nine months ended September 30, 2017, we recorded net income of $91.4 million, as compared to $79.5$2,979.1 million for the same period last year.

Nurse and allied solutions segment revenue comprised ~~62%~~72% and 78% of total consolidated revenue for ~~both~~ the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016.~~2022, respectively. Through our nurse and allied solutions segment, we provide hospitals and other healthcare facilities with a comprehensive managed services solution in which we manage and staff all of the temporary and permanent nursing and allied staffing needs of a ~~client~~client. We also provide revenue cycle solutions, which include skilled labor solutions for remote medical coding, clinical documentation improvement, case management, and clinical data registry, and provide auditing and advisory services. A majority of our placements in this segment are under our managed services solution, however, we also provide traditional ~~clinical~~direct nurse and allied healthcare staffing solutions of variable assignment lengths.

~~Locum tenens~~Physician and leadership solutions segment revenue comprised ~~22%~~16% and ~~23%~~12% of total consolidated revenue for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016,~~2022, respectively. Through our ~~locum tenens~~physician and leadership solutions segment, we ~~provide a comprehensive managed services solution in which we manage all of the locum tenens needs of a client and~~ place physicians of all specialties, as well as dentists and ~~other~~ advanced practice providers, with clients on a temporary basis, generally as independent contractors. ~~These locum tenens providers are used by our~~We also recruit physicians and healthcare ~~facility~~leaders for permanent placement and ~~physician practice group clients to fill temporary vacancies created by vacation~~place interim leaders and ~~leave schedules~~executives across all healthcare settings. The interim healthcare leaders and to bridge the gap while they seek permanent candidates or explore expansion. Our locum tenens clients represent a diverse group of healthcare organizations throughout the United States, including hospitals, health systems, medical groups, occupational medical clinics, psychiatric facilities, government institutions, and insurance entities. The professionalsexecutives we place ~~are recruited nationwide and~~ are typically placed on contracts with assignment lengths ranging from a few days up to one ~~year.~~year, and a growing number of these placements are under our managed services solution.

~~Other~~Technology and workforce solutions segment revenue comprised ~~16%~~12% and ~~15%~~10% of total consolidated revenue for both of the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016,~~2022, respectively. Through our ~~other~~technology and workforce solutions segment, we provide hospitals and other healthcare facilities with a range of workforce solutions, including: (1) ~~identifying and recruiting physicians and healthcare leaders for permanent placement,~~language services, (2) ~~placing interim leaders and executives across all healthcare settings, (3) a~~ software-as-a-service (“SaaS”) VMS technologies through which our clients can manage ~~all of~~ their temporary staffing needs, (3) workforce optimization services that include consulting, data analytics, predictive modeling, and SaaS-based scheduling technology, (4) ~~RPO~~recruitment process outsourcing services that leverage our expertise and support systems to replace or complement a client’s existing internal recruitment function for permanent placement needs, and (5) virtual care services.

Operating Metrics

In addition to our consolidated and segment financial results, we monitor the following key metrics to help us evaluate our results of operations and financial condition and make strategic decisions. We believe this information is useful in understanding our operational performance and trends affecting our businesses.

•Average travelers on assignment represents the average number of nurse and allied healthcare professionals on assignment during the period, which is used by management as a measure of volume in our nurse and allied solutions segment;

•Bill rates represent the hourly straight-time rates that we bill to clients, which are an ~~education program~~indicator of labor market trends and costs within our nurse and allied solutions segment;

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•Billable hours represent hours worked by our healthcare professionals that ~~provides custom healthcare education, research, professional practice tools,~~we are able to bill on client engagements, which are used by management as a measure of volume in our nurse and ~~professional development services, (6) medical coding~~allied solutions segment;

•Days filled is calculated by dividing total locum tenens hours filled during the period by eight hours, which is used by management as a measure of volume in our locum tenens business within our physician and ~~related consulting services,~~leadership solutions segment; and ~~(7) workforce optimization services that include consulting, data analytics, predictive modeling,~~

•Revenue per day filled is calculated by dividing revenue of our locum tenens business by days filled for the period, which is an indicator of labor market trends and ~~SaaS-based scheduling technology.~~costs in our locum tenens business within our physician and leadership solutions segment.

Recent Trends

Demand for our temporary and permanent placement staffing services is driven in part by U.S. economic and labor ~~trends. The U.S. Bureau~~trends, and from early 2020 through 2022, the COVID-19 pandemic and the “Great Resignation” impacted demand. From late 2020 through most of Labor Statistics’ survey data reflect near record levels of healthcare job openings and quits, which we view as positive trends for the healthcare staffing industry. At the same time, the entire healthcare industry continues to face uncertainty related to the potential dismantling, or significant change to certain aspects of, the Affordable Care Act, which could impact the reimbursements upon which our clients depend. The uncertainty has impacted the utilization of healthcare services and2022, these conditions resulted in historically high demand for our ~~services.~~nurses and allied healthcare professionals. In 2023, with the pandemic easing, demand in our travel nurse business has declined significantly from historic highs and, while we did see an increase from the end of the first quarter of 2023, demand in the second quarter remained below pre-pandemic levels. Demand in our allied business continues to be above pre-pandemic levels and certain specialties such as therapy are up significantly year over year. Healthcare organizations have hired permanent staff aggressively, enabling them to reduce what had been historically high utilization of contingent labor. Our clients have accelerated initiatives designed to contain costs of their spend on contingent labor, and we have a number of clients that are reevaluating their approach and seeking more sustainable workforce solutions. However, our clients are still dealing with significant labor shortages as their progress on permanent hiring and retention has only partly resolved the high levels of vacancies and staff attrition.

~~We continue to see~~Wages for nurses and the ~~benefits~~corresponding bill rates we charge our clients peaked in the first quarter of ~~our workforce solutions strategy, particularly with our managed services programs. As a result of our ongoing focus on these strategic relationships, we continue to increase the percentage of~~2022. Bill rates in our nurse and allied ~~revenue derived from~~solutions segment decreased year over year and quarter over quarter in the second quarter of 2023. After the pandemic, our ~~managed services program clients.~~

clients have significantly fewer surprise vacancies, and most of the bill rate decrease reflects less urgent needs. We expect bill rates and clinician compensation to stabilize and remain above pre-pandemic levels in 2023.

In our physician and leadership solutions segment, demand for our locum tenens ~~solutions segment, we~~business is well above pre-pandemic levels. We have seen ~~a decline~~several years of growth in ~~demand in certain specialties such as hospitalists~~certified registered nurse anesthetists (CRNAs), the specialty that ~~has negatively impacted our volumes and, as a result,~~represents the largest percentage of revenue in this ~~segment.~~business. In ~~addition,~~recent quarters, we ~~made organizational~~have also seen an uptick in demand for anesthesiologists. We expect strong demand for locum tenens staffing to continue in the third quarter of 2023. Demand was lower for our interim leadership and search businesses in the second quarter of 2023 as some healthcare organizations streamlined leadership ~~changes in this business and are making operational changes~~roles, deferred hiring decisions, or moved to ~~improve performance. We are beginning to see the positive impact of these changes and improving demand in most specialties.~~

build out their internal talent acquisition teams.

In our ~~other~~technology and workforce solutions segment, our ~~interim leadership~~language services business continued to experience increased utilization and ~~vendor management systems businesses are growing. We are experiencing declines~~shift to more virtual interpretation. This year, we have seen significant margin compression from competitive pressures. As anticipated, bill rates and volumes in our ~~permanent placement businesses that we believe are primarily related~~VMS business followed similar trends as our nurse and allied solutions segment, declining from historic highs. We anticipate our VMS business to ~~operational execution~~continue to trend along the same lines as our nurse and ~~are making organizational changes designed to improve our performance.~~allied solutions segment with bill rates stabilizing in 2023 above pre-pandemic levels.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in conformity with United States generally accepted accounting principles (“U.S. GAAP”) requires us to make estimates and judgments that affect our reported amounts of assets and liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to intangible assets purchased in a business combination, asset impairments, accruals for self-insurance, compensation and related benefits, accounts receivable, contingencies and litigation, ~~earn-out~~contingent consideration (“earn-out”) liabilities associated with acquisitions, and income taxes. We base these estimates on the information that is currently available to us and on various other assumptions that we believe are reasonable under the circumstances. Actual results could vary from these estimates under different assumptions or conditions. If these estimates differ significantly from actual results, our consolidated financial statements and future results of operations may be materially impacted. There have been no material changes in our critical accounting policies and estimates, other than the adoption of the Accounting ~~Standards~~Standard Update (“ASU”) ~~2016-09~~ described in ~~Item 1. Condensed Consolidated Financial Statements—~~the accompanying Note 1,(1), “Basis of Presentation,” as compared to the critical accounting policies and estimates described in our ~~2016~~2022 Annual Report.

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Results of Operations

The following table sets forth, for the periods indicated, selected unaudited condensed consolidated statements of operations data as a percentage of revenue. Our results of operations include three reportable segments: (1) nurse and allied solutions, (2) ~~locum tenens~~physician and leadership solutions, and (3) ~~other~~technology and workforce solutions. The ~~Peak~~Connetics acquisition impacts the comparability of the results between the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016.~~2022. See additional information in the accompanying Note (2), “Acquisitions.” Our historical results are not necessarily indicative of our future results of operations.


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Unaudited Condensed Consolidated Statements of Operations:
Revenue	100.0	%	100.0	%	100.0	%	100.0	%
Cost of revenue	66.7		67.7		67.0		67.9
Gross profit	33.3		32.3		33.0		32.1
Selling, general and administrative	20.4		17.1		19.2		16.9
Depreciation and amortization	3.7		2.3		3.5		2.1
Income from operations	9.2		12.9		10.3		13.1
Interest expense, net, and other	1.2		0.7		1.1		0.6
Income before income taxes	8.0		12.2		9.2		12.5
Income tax expense	1.9		3.5		2.4		3.4
Net income	6.1	%	8.7	%	6.8	%	9.1	%

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Unaudited Condensed Consolidated Statements of Operations:
Revenue 100.0 % 100.0 % 100.0 % 100.0 %
Cost of revenue 67.7
67.3
67.4
67.4
Gross profit 32.3
32.7
32.6
32.6
Selling, general and administrative 20.3
21.2
20.2
21.0
Depreciation and amortization 1.7
1.6
1.6
1.6
Income from operations 10.3
9.9
10.8
10.0
Interest expense, net, and other 1.0
0.6
1.0
0.6
Income before income taxes 9.3
9.3
9.8
9.4
Income tax expense 3.6
3.5
3.6
3.8
Net income 5.7 % 5.8 % 6.2 % 5.6 %

Comparison of Results for the Three Months Ended ~~September~~June 30, ~~2017~~2023 to the Three Months Ended ~~September~~June 30, ~~2016~~2022

Revenue. Revenue ~~increased 5%~~decreased 31% to ~~$494.4~~$991.3 million for the three months ended ~~September~~June 30, ~~2017~~2023 from ~~$472.6~~$1,426.6 million for the same period in ~~2016, all of which was organic growth.~~2022, primarily attributable to declines in revenue in our nurse and allied solutions and technology and workforce solutions segments.

Nurse and allied solutions segment revenue ~~increased 6%~~decreased 37% to ~~$302.9~~$689.0 million for the three months ended ~~September~~June 30, ~~2017~~2023 from ~~$286.8~~$1,101.5 million for the same period in ~~2016.~~2022. The ~~$16.1~~$412.5 million ~~increase~~decrease was primarily attributable to an approximately 19% decrease in the average bill rate, a ~~4% increase~~17% decrease in the average number of ~~healthcare professionals~~travelers on assignment, a 3% decrease in billable hours, and ~~a 2% increase~~an approximately $78.0 million decrease in ~~the average bill rate~~labor disruption revenue during the three months ended ~~September~~June 30, ~~2017~~.2023.

~~Locum tenens~~Physician and leadership solutions segment revenue increased 3%slightly to ~~$111.4~~$176.2 million for the three months ended ~~September~~June 30, ~~2017~~2023 from ~~$108.6~~$175.7 million for the same period in ~~2016.~~2022. The ~~$2.8~~$0.5 million increase was ~~primarily~~ attributable to higher revenue in our locum tenens business, partially offset by lower revenue in our interim leadership, physician permanent placement and executive search businesses. Revenue in our locum tenens business grew approximately 15% during the three months ended June 30, 2023 primarily due to a 4%14% increase in the revenue per day filled ~~during the three months ended September 30, 2017, partially offset by~~and a 1% ~~decrease~~increase in the number of days filled.

~~Other workforce solutions segment revenue increased 4% to $80.1 million for the~~ ~~three months ended September 30, 2017~~ ~~from~~ ~~$77.3 million~~ ~~for the same period in 2016. The $2.8 million increase was primarily attributable to growth in our VMS and~~ Our interim leadership ~~businesses, partially offset by declines in~~business experienced a 24% decline and our physician permanent placement and executive search businesses declined 19% during the three months ended ~~September~~June 30, ~~2017.~~2023, primarily due to lower demand.

~~Gross Profit~~. ~~Gross profit increased 3%~~Technology and workforce solutions segment revenue decreased 16% to ~~$159.5~~$126.1 million for the three months ended ~~September~~June 30, ~~2017~~2023 from ~~$154.5~~$149.4 million for the same period in ~~2016,~~2022. The $23.3 million decrease was primarily attributable to a decline within our VMS business, partially offset by growth within our language services business. Revenue for our VMS business declined 38% for the same reasons as nurse and allied solutions segment revenue, while our language services business grew 19% during the three months ended June 30, 2023.

For the three months ended June 30, 2023 and 2022, revenue under our MSP arrangements comprised approximately 54% and 60% of our consolidated revenue, 73% and 75% of our nurse and allied solutions segment revenue, 21% and 17% of our physician and leadership solutions segment revenue, and 2% and 1% of our technology and workforce solutions segment revenue, respectively.

Gross Profit. Gross profit decreased 28% to $330.3 million for the three months ended June 30, 2023 from $460.2 million for the same period in 2022, representing gross margins of ~~32.3%~~33.3% and ~~32.7%~~32.3%, respectively. The ~~decrease~~increase in consolidated gross

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margin for the three months ended June 30, 2023, as compared to the same period in 2022, was primarily due to ~~an unfavorable~~(1) a change in sales mix ~~higher insurance costs~~resulting from lower revenue in our ~~other workforce~~nurse and allied solutions segment and ~~lower bill-pay spreads in the locum tenens solutions segment, partially offset by~~(2) a higher ~~gross~~ margin in ~~the~~our nurse and allied solutions segment driven by a revenue mix shift within the segment. The overall increase was partially offset by a lower margin in our technology and workforce solutions segment primarily bydue to a change in sales mix resulting from lower ~~direct costs during~~revenue in our VMS business and its higher margins as compared to our other businesses within the ~~three months ended September 30, 2017.~~segment. Gross margin by reportable segment for the three months ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022 was ~~27.3%~~26.7% and ~~26.7%~~25.7% for nurse and allied solutions, ~~30.1%~~35.1% and ~~31.2%~~34.2% for ~~locum tenens~~physician and leadership solutions, and ~~54.1%~~66.7% and ~~56.7%~~78.3% for ~~other~~technology and workforce solutions, respectively.

Selling, General and Administrative Expenses. Selling, general and administrative (“SG&A”) expenses were ~~$100.6~~$201.8 million, representing ~~20.3%~~20.4% of revenue, for the three months ended ~~September~~June 30, ~~2017,~~2023, as compared to ~~$100.0~~$244.4 million, representing ~~21.2%~~17.1% of revenue, for the same period in ~~2016.~~2022. The ~~increase~~decrease in SG&A expenses was primarily due to ~~higher bad debt expense~~$53.7 million of lower employee compensation and benefits (inclusive of share-based compensation), partially offset by ~~operating leverage on the higher revenue~~a $18.3 million increase in professional services, legal and ~~lower acquisition and integration costs as compared to the same period last year. The decrease in unallocated corporate overhead was primarily attributable to lower~~

~~acquisition and integration costs and employee compensation~~other expenses. SG&A expenses broken down among the reportable segments, unallocated corporate overhead, and share-based compensation are as follows:


						(In Thousands)
	(In Thousands) Three Months Ended September 30,					Three Months Ended June 30,
	2017		2016			2023		2022
Nurse and allied solutions	$	41,884	$	39,312	Nurse and allied solutions	$	81,207	$	122,426
Locum tenens solutions	19,075		19,881
Other workforce solutions	23,445		22,985
Physician and leadership solutions					Physician and leadership solutions	35,487		40,010
Technology and workforce solutions					Technology and workforce solutions	29,902		35,408
Unallocated corporate overhead	13,698		15,113		Unallocated corporate overhead	50,357		38,073
Share-based compensation	2,477		2,704		Share-based compensation	4,818		8,513
	$	100,579	$	99,995		$	201,771	$	244,430

Depreciation and Amortization Expenses. Amortization expense ~~decreased slightly~~increased 9% to ~~$4.7~~$22.1 million for the three months ended ~~September~~June 30, ~~2017~~2023 from ~~$4.8~~$20.4 million for the same period in ~~2016.~~2022, primarily attributable to (1) the reduction of useful lives of certain staffing database intangible assets and (2) additional amortization expense related to the intangible assets acquired in the Connetics acquisition. Depreciation expense (exclusive of depreciation included in cost of revenue) increased ~~13%~~23% to ~~$3.4~~$14.7 million for the three months ended ~~September~~June 30, ~~2017~~2023 from ~~$3.0~~$12.0 million for the same period in ~~2016,~~2022, primarily attributable to an increase in purchased and developed hardware and software placed in service for our ongoing technology investments to support our total talent solutions initiatives and to optimize our internal front and ~~back office information technology initiatives.~~back-office systems. Additionally, $1.4 million and $1.0 million of depreciation expense for our language services business is included in cost of revenue for the three months ended June 30, 2023 and 2022, respectively.

Interest Expense, Net, and Other. Interest expense, net, and other was ~~$4.8~~$12.2 million during the three months ended ~~September~~June 30, ~~2017~~2023 as compared to ~~$3.0~~$10.1 million for the same period in ~~2016.~~2022. The increase iswas primarily due to a higher ~~interest bearing Notes (as defined below)~~average debt outstanding balance during the three months ended June 30, 2023.

Income Tax Expense. Income tax expense was $18.6 million for the three months ended ~~September~~June 30, ~~2017,~~2023 as compared to ~~the term loans and revolver in the same period last year.~~

~~Income Tax Expense~~. ~~Income tax expense was $17.9 million for the~~ ~~three months ended September 30, 2017~~ ~~as compared to income tax expense of $16.4~~$49.7 million for the same period in ~~2016,~~2022, reflecting effective income tax rates of ~~39%~~23% and ~~37%~~29% for ~~the three months ended September 30, 2017 and 2016,~~these periods, respectively. The ~~difference~~decrease in the effective income tax rate was primarily attributable to the ~~relationship~~recognition of ~~pre-tax~~$3.5 million of net discrete tax benefits during the three months ended June 30, 2023 compared to a $2.7 million net discrete tax expense during the same period in 2022, in relation to income ~~to permanent differences related to unrecognized tax benefits.~~before income taxes of $79.5 million and $173.5 million for the three months ended June 30, 2023 and 2022, respectively. We currently estimate our annual effective ~~income~~ tax rate to be approximately ~~38%~~27% for ~~2017.~~2023. The 23% effective tax rate for the three months ended June 30, 2023 differs from our estimated annual effective tax rate of 27% primarily due to certain discrete tax benefits recognized during the three months ended June 30, 2023, in relation to income before income taxes.

Comparison of Results for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2023 to the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2016~~2022

Revenue. Revenue ~~increased 5%~~decreased 29% to ~~$1,479.4~~$2,117.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 from ~~$1,414.4~~$2,979.1 million for the same period in ~~2016, due~~2022, attributable to ~~additional~~a decline in revenue ~~of $12.4 million resulting from~~across our ~~Peak acquisition in June 2016~~segments with the ~~remainder of the increase driven by 4% organic growth.~~greatest decline in our nurse and allied solutions segment.

Nurse and allied solutions segment revenue ~~increased 5%~~decreased 35% to ~~$917.2~~$1,513.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 from ~~$877.2~~$2,329.5 million for the same period in ~~2016.~~2022. The ~~$40.0~~$816.0 million ~~increase~~decrease was primarily attributable to an approximately 20% decrease in the average bill rate, a ~~5% increase~~14% decrease in the average number of ~~healthcare professionals~~travelers on assignment, ~~and~~ a 3% ~~increase~~decrease in ~~the average bill rate during the nine months ended September 30, 2017. The increase was partially offset by~~billable hours, and an approximately ~~$28.0~~$72.0 million decrease in labor disruption revenue ~~and~~during the ~~impact~~six months ended June 30,

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2023. The overall decrease was partially offset by an $8.5 million increase in permanent placement revenue primarily due to ~~last year being a leap year.~~timing of the Connetics acquisition.

~~Locum tenens~~Physician and leadership solutions segment revenue ~~was $322.5~~decreased 4% to $342.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017, as compared to $320.4~~2023 from $355.2 million for the same period in ~~2016.~~2022. The ~~$2.1~~$13.2 million ~~increase~~decrease was ~~primarily~~ attributable to lower revenue in our interim leadership, physician permanent placement and executive search businesses, which was partially offset by higher revenue in our locum tenens business. Revenue in our locum tenens business grew approximately 5% during the six months ended June 30, 2023 primarily due to a 4%9% increase in the revenue per day filled, ~~during the nine months ended September 30, 2017,~~ partially offset by a 3%4% decrease in the number of days filled. Our interim leadership business experienced an approximately 17% decline and our physician permanent placement and executive search businesses declined 18% during the six months ended June 30, 2023, primarily due to lower demand.

~~Other~~Technology and workforce solutions segment revenue ~~increased~~decreased 11% to ~~$239.7~~$262.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 from ~~$216.8~~$294.4 million for the same period in ~~2016. Of the $22.9~~2022. The $32.4 million ~~increase, $12.4 million~~decrease was ~~attributable to the additional revenue in connection with the Peak acquisition in June 2016 with the remainder~~ primarily attributable to ~~growth in~~a decline within our VMS ~~interim leadership, and workforce optimization businesses,~~business, partially offset by ~~declines in~~growth within our ~~permanent placement~~language services business. Revenue for our VMS business declined 33% for the same reasons as nurse and ~~recruitment process outsourcing businesses~~allied solutions segment revenue, while our language services business grew 22% during the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2023.

For the six months ended June 30, 2023 and 2022, revenue under our MSP arrangements comprised approximately 56% and 64% of our consolidated revenue, 73% and 80% of our nurse and allied solutions segment revenue, 21% and 17% of our physician and leadership solutions segment revenue, and 2% and 2% of our technology and workforce solutions segment revenue, respectively.

Gross Profit. Gross profit ~~increased 5%~~decreased 27% to ~~$482.3~~$699.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 from ~~$461.1~~$956.4 million for the same period in ~~2016,~~2022, representing gross margins of ~~32.6% for both periods. Consolidated~~33.0% and 32.1%, respectively. The increase in consolidated gross margin ~~was consistent with~~for the ~~prior year~~six months ended June 30, 2023, as compared to the same period in 2022, was primarily due to (1) a change in sales mix resulting from lower revenue in our nurse and allied solutions segment and (2) a higher ~~gross~~ margin in ~~the~~our nurse and allied solutions segment driven ~~primarily~~ by ~~lower direct costs,~~a revenue mix shift within the segment. The overall increase was partially offset by a lower ~~bill-pay spreads~~margin in ~~the locum tenens~~our technology and workforce solutions segment ~~and an unfavorable~~primarily due to a change in sales mix resulting from lower revenue in our VMS business and its higher margins as compared to our other ~~workforce solutions segment during~~businesses within the ~~nine months ended September 30, 2017.~~segment. Gross margin by reportable segment for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022 was ~~27.6%~~26.3% and ~~26.7%~~26.0% for nurse and allied ~~soluti~~

~~ons, 30.2%~~solutions, 35.2% and ~~31.2%~~34.6% for ~~locum tenens~~physician and leadership solutions, and ~~54.9%~~69.2% and ~~58.6%~~77.5% for ~~other~~technology and workforce solutions, respectively.

Selling, General and Administrative Expenses. SG&A expenses were ~~$299.3~~$407.4 million, representing ~~20.2%~~19.2% of revenue, for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, as compared to ~~$297.4~~$502.0 million, representing ~~21.0%~~16.9% of revenue, for the same period in ~~2016.~~2022. The ~~increase~~decrease in SG&A expenses was primarily due to ~~$1.9~~$110.7 million of ~~additional SG&A expenses from the Peak acquisition~~lower employee compensation and benefits (inclusive of share-based compensation), partially offset by a $21.0 million increase in professional services, legal and other expenses associated with our revenue growth, offset by an additional $2.0 million favorable actuarial-based decrease in our professional liability reserves and $2.1 million decrease in acquisition and integration costs as compared to the same period last year. The decrease in unallocated corporate overhead was primarily attributable to lower acquisition and integration costs.expenses. SG&A expenses broken down among the reportable segments, unallocated corporate overhead, and share-based compensation are as follows:


						(In Thousands)
	(In Thousands) Nine Months Ended September 30,					Six Months Ended June 30,
	2017		2016			2023		2022
Nurse and allied solutions	$	118,464	$	115,755	Nurse and allied solutions	$	181,204	$	249,422
Locum tenens solutions	58,507		56,247
Other workforce solutions	69,902		70,654
Physician and leadership solutions					Physician and leadership solutions	68,695		82,499
Technology and workforce solutions					Technology and workforce solutions	61,245		68,595
Unallocated corporate overhead	44,732		45,908		Unallocated corporate overhead	81,090		81,721
Share-based compensation	7,720		8,795		Share-based compensation	15,136		19,772
	$	299,325	$	297,359		$	407,370	$	502,009

Depreciation and Amortization Expenses. Amortization expense increased 2%10% to ~~$13.9~~$43.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 from ~~$13.6~~$40.0 million for the same period in ~~2016,~~2022, primarily attributable to (1) the reduction of useful lives of certain staffing database intangible assets and (2) additional amortization expense related to the intangible assets acquired in the ~~Peak~~Connetics acquisition. Depreciation expense (exclusive of depreciation included in cost of revenue) increased ~~18%~~33% to ~~$9.8~~$30.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 from ~~$8.3~~$23.0 million for the same period in ~~2016,~~2022, primarily attributable to ~~fixed assets acquired as part of the Peak acquisition and~~ an increase in purchased and developed hardware and software placed in service for our ongoing technology investments to support our total talent solutions initiatives and to optimize our internal front and ~~back office information technology initiatives.~~back-office systems. Additionally, $2.6 million and $1.8 million of depreciation expense for our language services business is included in cost of revenue for the six months ended June 30, 2023 and 2022, respectively.

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Interest Expense, Net, and Other. Interest expense, net, and other was ~~$14.9~~$22.4 million during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 as compared to ~~$9.1~~$19.7 million for the same period in ~~2016.~~2022. The increase iswas primarily due to a higher ~~interest bearing Notes (as defined below) for~~average debt outstanding balance during the ~~nine~~six months ended ~~September~~June 30, ~~2017, as compared to the term loans and revolver in the same period last year.~~2023.

Income Tax Expense. Income tax expense was ~~$53.0~~$49.9 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 as compared to ~~income tax expense of $53.3~~$102.0 million for the same period in ~~2016,~~2022, reflecting effective income tax rates of ~~37%~~26% and ~~40%~~27% for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016,~~2022, respectively. The ~~difference~~decrease in the effective income tax rate was primarily attributable to the ~~relationship~~Company’s recognition of ~~pre-tax income to permanent differences related to unrecognized~~$4.2 million of net discrete tax benefits ~~and excess tax benefit from~~during the ~~adoption~~six months ended June 30, 2023 compared to $1.7 million of ~~ASU 2016-09, “Stock Compensation - Improvements to Employee Share-Based Payment Accounting” in the first quarter of 2017, which resulted in recording a $5.4 million reduction in income~~net discrete tax expense recognized during the same period in 2022, in relation to income before income taxes of $194.9 million and $371.8 million for the ~~nine~~six months ended ~~September~~June 30, 2017. Prior to adoption, this amount would have been recorded as additional paid-in capital. Since the majority of our equity awards vest during the first quarter of the year, we do not anticipate the recording of additional excess tax benefits of this magnitude for the remainder of the year. This change could create future volatility in our2023 and 2022, respectively. The 26% effective tax rate ~~depending upon~~for the ~~amount of exercise or vesting activity~~six months ended June 30, 2023 differs from our share-based awards. See additional information in Item 1. Condensed Consolidated Financial Statements—Note 1 “Basis of Presentation.” Including the impact of the adoption of ASU 2016-09, we currently estimate ourestimated annual effective ~~income~~ tax rate of 27% primarily due to ~~be approximately 38% for 2017.~~certain discrete tax benefits recognized during the six months ended June 30, 2023, in relation to income before income taxes.

Liquidity and Capital Resources

In summary, our cash flows were:


	(In Thousands)
	Six Months Ended June 30,
	2023		2022

Net cash provided by operating activities	$	241,101	$	424,677
Net cash used in investing activities	(54,859)		(115,762)
Net cash used in financing activities	(247,744)		(411,688)

(In Thousands)
Nine Months Ended September 30,
2017 2016

Net cash provided by operating activities $ 96,382
$ 84,820
Net cash used in investing activities (23,444 ) (241,271 )
Net cash provided by (used in) financing activities (63,824 ) 162,418

Historically, our primary liquidity requirements have been for acquisitions, working capital requirements, and debt service under our credit facilities and ~~the Notes.~~senior notes. We have funded these requirements through internally generated cash flow and funds borrowed under our credit facilities. ~~During the third quarter of 2017, we paid off the remaining balance of our term debt.~~

As of ~~September~~June 30, ~~2017, zero~~2023, (1) $190.0 million was drawn ~~from $258.8~~with $539.2 million of available credit under ~~the~~our $750.0 million secured revolving credit facility (the ~~“Revolver”~~“Senior Credit Facility”) ~~and~~, (2) the aggregate principal amount of our ~~5.125% Senior Notes~~4.625% senior notes due ~~2024~~2027 (the ~~“Notes”~~“2027 Notes”) outstanding ~~equaled $325.0~~was $500.0 million, and (3) the aggregate principal amount of our 4.000% senior notes due 2029 (the “2029 Notes”) outstanding was $350.0 million. We describe in further detail our ~~amended credit agreement,~~Amended Credit Agreement (as defined below), under which ~~our term loan and Revolver are~~the Senior Credit Facility is governed, the 2027 Notes, and the 2029 Notes in ~~“Item 8. Financial~~Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (8), Notes Payable and Credit Agreement” of our ~~2016~~2022 Annual Report.

As of June 30, 2023, the total of our contractual obligations under operating leases with initial terms in excess of one year was $46.5 million. We describe in further detail our operating lease arrangements in Note (9), “Commitments and Contingencies,” of this Quarterly Report and Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (5), Leases” of our 2022 Annual Report. We also have various obligations and working capital requirements, such as certain tax and legal matters, contingent consideration and other liabilities, that are recorded on ~~Form 10-K.~~our consolidated balance sheets. See additional information in the accompanying Note (7), “Fair Value Measurement,” Note (8), “Income Taxes,” Note (9), “Commitments and Contingencies,” and Note (10), “Balance Sheet Details.”

In ~~April 2015,~~addition to our cash requirements, we have a share repurchase program authorized by our board of directors, which does not require the purchase of any minimum number of shares and may be suspended or discontinued at any time. See additional information in the accompanying Part II, Item 2, “Unregistered Sales of Equity Securities and Use of Proceeds.” Under the repurchase program, we entered into an ~~interest rate swap~~accelerated share repurchase (“ASR”) agreement with a counterparty on May 8, 2023 to ~~minimize our exposure to interest rate fluctuations on $100~~repurchase $200.0 million of our outstanding ~~variable rate debt~~common stock and received an initial delivery of 1.8 million shares. The ASR was funded through borrowings under one of our term loans for which we pay a fixed rate of 0.983% per annum and receive a variable rate equal to floating one-month LIBOR. This agreement expires on March 30, 2018, and no initial investment was made to enter into this agreement. On October 3, 2016, we reduced the ~~interest rate swap notional amount to $40 million. On May 3, 2017, we terminated~~Senior Credit Facility. See additional information in the ~~remaining interest rate swap.~~accompanying Note (4), “Net Income Per Common Share.”

We believe that cash generated from operations and available borrowings under the ~~Revolver~~Senior Credit Facility will be sufficient to fund our operations and liquidity requirements, including expected capital expenditures, for ~~at least~~ the next ~~year.~~12 months and beyond. We intend to finance potential future acquisitions ~~either~~ with cash provided from operations, borrowings under the ~~Revolver,~~Senior Credit Facility or other borrowings under our amended credit agreement, bank loans, debt or equity offerings, or some combination of the foregoing. The following discussion provides further details of our liquidity and capital resources.

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Operating Activities

Net cash provided by operating activities for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 was ~~$96.4~~$241.1 million, compared to ~~$84.8~~$424.7 million for the same period in ~~2016.~~2022. The ~~increase~~decrease in net cash provided by operating activities was primarily attributable to (1) ~~improved operating results, (2)~~ a decrease in ~~accounts receivable and subcontractor receivable between periods~~net income excluding non-cash expenses of $122.0 million primarily due to ~~timing of collections,~~a decline in operating results in our nurse and (3) excess tax benefits on the vesting of employee equity awards resulting from the adoption of a new accounting pronouncement discussed in Item 1. Condensed Consolidated Financial Statements—Note (1), “Basis of Presentation.” The overall increase was partially offset by (1)allied solutions and technology and workforce solutions segments, (2) a decrease in accounts payable and accrued expenses between periods of $189.3 million primarily due to decreased associate vendor usage, (3) a decrease in accrued compensation and benefits between periods of $158.2 million primarily due to prior year increases in pay rates and the average number of travelers on assignment in our nurse and allied solutions segment and increased employee compensation and benefits in 2022, including accrued bonuses and commissions that were paid during the first quarter of 2023, and (4) increases in prepaid expenses and other current assets between periods of $44.3 million and $13.5 million, respectively, primarily due to prepayments and deposits that were made in 2021 and refunded by third-party vendors in 2022 related to labor disruption services. The overall decrease in net cash provided by operating activities was partially offset by (1) a decrease in accounts receivable and subcontractor receivables between periods of $177.9 million primarily due to a decrease in the receivables balance in the current year as compared to an increase in the prior year, which was due to increases in revenue and associate vendor usage in the prior year along with timing of ~~payments,~~collections during the six months ended June 30, 2023 and (2) ~~additional~~an increase in other liabilities between periods of $155.6 million due to lower cash paid for income taxes and an increase to accrued loss contingencies in the current year, in addition to client deposits related to labor disruption services that were returned during the nine months ended September 30, 2017 as compared to the same period last year, and (3) an increase in the cash, cash equivalents and investments attributable to cash payments made to our captive insurance entity, which are restricted for use by the captive for future claim payments and, to a lesser extent, its working capital needs.prior year. Our Days Sales Outstanding (“DSO”) was 6453 days at ~~each of September~~June 30, ~~2017,~~2023, 55 days at December 31, ~~2016,~~2022, and ~~September~~50 days at June 30, ~~2016.~~

2022.

Investing Activities

Net cash used in investing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 was ~~$23.4~~$54.9 million, compared to ~~$241.3~~net cash used in investing activities of $115.8 million for the same period in ~~2016.~~2022. The decrease was primarily due to (1) $69.8 million used for acquisitions during the six months ended June 30, 2022, as compared to no cash paid for acquisitions during the ~~nine~~six months ended ~~September~~June 30, ~~2017 as compared to $216.6 million used for acquisitions during the nine months ended September 30, 2016~~2023, and (2) net $6.2 million restricted investment proceeds related to our captive insurance entity during the nine months ended September 30, 2017. The overall decrease was partially offset by (1) a $2.0 million equity investment and (2) $10.1$17.9 million of payments to fund the deferred compensation plan during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023, as compared to ~~$5.7~~$12.6 million of payments during the ~~nine~~six months ended ~~September~~June 30, ~~2016. Capital~~2022. The overall decrease was partially offset by net proceeds of investments of $7.0 million during the six months ended June 30, 2023, as compared to a net purchase of $1.6 million during the six months ended June 30, 2022. In addition, capital expenditures were ~~$17.2~~$43.9 million and ~~$17.7~~$30.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016,~~2022, respectively.

Financing Activities

Net cash used in financing activities during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 was ~~$63.8~~$247.7 million, primarily due to (1) ~~the repayment of $44.1 million under our term loans, (2) $3.7 million for acquisition contingent consideration earn-out payments, (3) $7.1~~$424.7 million paid in connection with the repurchase of our common stock, ~~and (4) $9.1~~(2) repayments of $220.0 million under the Senior Credit Facility, (3) $9.4 million in cash paid for shares withheld for payroll taxes resulting from the vesting of employee equity ~~awards.~~awards, and (4) $3.6 million payment of financing costs in connection with the Third Amendment (as defined below), all of which was partially offset by borrowings of $410.0 million under the Senior Credit Facility. Net cash ~~provided by~~used in financing activities during the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2022 was ~~$162.4~~$411.7 million~~, primarily~~ due to ~~borrowings~~$401.9 million paid in connection with the repurchase of ~~$124.0~~our common stock and $9.8 million under the Revolver and $75.0 million of borrowings under a new term loan under our amended credit agreement to fund our BES and HSG acquisitions, partially offset by (1) the repayment of $8.4 million under our term loans and $24.0 million under the Revolver, and (2) $5.6 millionin cash paid for shares withheld for payroll taxes resulting from the vesting of employee equity awards.

Amended Credit Agreement

On February 10, 2023, we entered into the third amendment to our credit agreement (the “Third Amendment”). The Third Amendment (together with the credit agreement as amended to date, collectively, the “Amended Credit Agreement”) provides for, among other things, an increase to the revolving commitments under the Senior Credit Facility to $750.0 million and an extension of the maturity date of the Amended Credit Agreement to February 10, 2028. Our obligations under the Amended Credit Agreement are secured by substantially all of our assets. We describe in further detail the terms of the Amended Credit Agreement, including maturity dates and interest terms, in Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (8), Notes Payable and Credit Agreement” of our 2022 Annual Report.

Letters of Credit

At ~~September~~June 30, ~~2017~~,2023, we maintained outstanding standby letters of credit totaling ~~$20.2~~$21.3 million as collateral in relation to our ~~professional liability insurance agreements,~~ workers’ compensation insurance agreements and a corporate office lease agreement. Of the ~~$20.2~~$21.3 million of outstanding letters of credit, we have collateralized ~~$4.0~~$0.5 million in cash and cash equivalents and the remaining ~~amounts are~~$20.8 million is collateralized by the ~~Revolver.~~Senior Credit Facility. Outstanding standby letters of credit at December 31, ~~2016~~2022 totaled ~~$15.4~~$22.0 million.

Recent Accounting Pronouncements

~~Off-Balance Sheet Arrangements~~

At ~~September 30, 2017~~, we did not have any off-balance sheet arrangement that has or is reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results

Table of ~~operations, liquidity, capital expenditures, or capital resources that is material to investors.~~Contents

~~Contractual Obligations~~

There have been no material changes to the table entitled “Contractual Obligations” in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in our 2016 Annual Report that occurred during the nine months ended September 30, 2017.

~~Recent Accounting Pronouncements~~

In May 2014, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance related to revenue recognition. This new standard will replace all current U.S. GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. This guidance can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. In July 2015, the FASB voted to amend the guidance by approving a one-year delay in the effective date of the new standard to 2018. In addition, the FASB has also issued several amendments to the standard which clarify certain aspects of the guidance, including principal versus agent consideration and identifying performance obligations. We expect to complete our evaluation of the impact of the accounting and disclosure requirements on our consolidated financial statements, business processes, controls and systems during the fourth quarter of 2017. This includes reviewing current accounting policies and practices to identify potential impact of the accounting and disclosure requirements on our business processes, controls and system. The extent of the impact of the adoption of this new standard is subject to the completion of our assessment by the end of 2017. We will adopt this standard in the first quarter of 2018, and apply the modified retrospective approach.

In February 2016, the FASB issued ASU 2016-02, “Leases.” This standard requires organizations that lease assets to recognize the assets and liabilities created by those leases. The standard also will require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The ASU becomes effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. We are required to adopt the guidance on a modified retrospective basis and can elect to apply optional practical expedients. We are currently evaluating the approach we will take and the impact of adopting this new standard on our consolidated financial statements and related disclosures.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” The standard provides guidance on how certain cash receipts and payments are presented and classified in the statement of cash flows. For public entities, ASU 2016-15 is effective for fiscal years beginning

after December 15, 2017, and interim periods within those annual periods, and requires a retrospective approach. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the timing of this new standard’s adoption and the effect that adopting it will have on our financial statements and related disclosures.

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash.” The standard requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance is effective for interim and annual periods beginning after December 15, 2017 and early adoption is permitted. The amendment will be adopted retrospectively. We are currently evaluating the timing of this new standard’s adoption and the effect that adopting it will have on our financial statements and related disclosures.

In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The standard simplifies the subsequent measurement of goodwill by removing the requirement to perform a hypothetical purchase price allocation to compute the implied fair value of goodwill to measure impairment. Instead, any goodwill impairment will equal the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Further, the guidance eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. This standard is effective for annual or any interim goodwill impairment test in fiscal years beginning after December 15, 2019, with early adoption permitted for impairment tests performed after January 1, 2017. While we continue to assess the potential impact of this standard, we do not expect the adoption of this standard to have a material impact on our consolidated financial statements.

~~There have been no other~~ new accounting pronouncements issued but not yet adopted that are expected to materially affect our consolidated financial condition or results of operations.

Special Note Regarding Forward-Looking Statements

This Quarterly Report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We base these forward-looking statements on our expectations, estimates, forecasts, and projections about future events and about the industry in which we operate. Forward-looking statements are identified by words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “will,” “should,” “would,” “project,” “may,” variations of such words, and other similar expressions. In addition, any statements that refer to projections of demand or supply trends, financial items, anticipated growth, future growth and revenues, future economic conditions and performance, plans, objectives and strategies for future operations, expectations, or other characterizations of future events or circumstances are forward-looking statements. All forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those discussed in, or implied by, these forward-looking statements. Factors that could cause actual results to differ materially from those implied by the forward-looking statements in this Quarterly Report are set forth in our ~~2016~~2022 Annual Report and include but are not limited to:

•the effects of the COVID-19 pandemic on our business, financial condition and results of operations;

•the duration and extent to which hospitals and other healthcare entities adjust their utilization of temporary nurses and allied healthcare professionals, physicians, healthcare leaders and other healthcare professionals and workforce technology applications as a result of the labor market, economic conditions or COVID-19 pandemic;

•the extent to which a spike in the COVID-19 pandemic may disrupt our operations due to the unavailability of our employees or healthcare professionals because of illness, risk of illness, quarantines, travel restrictions, mandatory vaccination requirements, desire to travel and work on temporary assignments or other factors that limit our existing or potential workforce and pool of candidates;

•the severity and duration of the impact the COVID-19 pandemic, the Great Resignation, economic downturns, inflation, recession or slow recoveries have on the financial condition and cash flow of many hospitals and healthcare systems such that it impairs their ability to make payments to us, timely or otherwise, for services rendered;

•the effects of economic downturns, inflation, recession or slow recoveries, which could result in less demand for our services, increased client initiatives designed to contain costs, including reevaluating their approach as it pertains to contingent labor and ~~pricing pressures;~~managed services programs;

~~the negative effects that intermediary organizations may have on our ability to secure new and profitable contracts with our clients;~~

the level of consolidation and concentration of buyers of healthcare workforce solutions and staffing services, which could affect the pricing of our services and our ability to mitigate concentration risk;

•any inability on our part to anticipate and quickly respond to changing marketplace conditions, such as alternative modes of healthcare delivery, reimbursement, or client ~~needs;~~needs and requirements, including mandatory vaccination requirements;

•the negative effects that intermediary organizations may have on our ability to secure new and profitable contracts;

•the level of consolidation and concentration of buyers of healthcare workforce, staffing and technology solutions, which could affect the pricing of our services and our ability to mitigate concentration risk;

•the ability of our clients ~~to retain and increase the productivity of their permanent staff, or their ability~~ to increase the efficiency and effectiveness of their ~~internal~~staffing management and recruiting efforts, through predictive analytics, online recruiting, telemedicine or otherwise, which may negatively affect our revenue, results of operations, and cash flows;

~~the uncertainty regarding the dismantling of certain aspects of the Patient Protection~~•any inability on our part to recruit and ~~Affordable Care Act that may significantly reduce the number of individuals who maintain health insurance or reduce the subsidies~~retain sufficient quality healthcare professionals at reasonable costs, which could increase our operating costs and ~~reimbursements to our clients, which, in turn, may~~ negatively affect ~~the demand for~~ our ~~services;~~business and profitability;

•any inability on our part to grow and operate our business profitably in compliance with federal and state ~~healthcare industry~~ regulation, including privacy laws, conduct of operations, costs and payment for services and payment for referrals as well as laws regarding employment and compensation practices and government contracting;

•any challenge to the classification of certain of our healthcare professionals as independent contractors, which could adversely affect our profitability;

•the effect of investigations, claims, and legal proceedings alleging medical malpractice, ~~violation~~anti-competitive conduct, violations of employment, privacy and wage regulations and other legal theories of liability asserted against us, which could subject us to substantial liabilities;

~~security breaches and other~~

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•any technology disruptions ~~that could compromise~~or our ~~information and expose us to liability, which could cause our business and reputation to suffer and could subject us to substantial liabilities;~~

~~any~~ inability ~~on our part~~ to implement new infrastructure and technology systems effectively ~~or technology disruptions, either of which~~ may adversely affect our operating results and ~~our~~ ability to manage our business effectively;

•any failure to further develop and evolve our current workforce solutions technology offerings and capabilities, which may harm our business and/or impact our ability to compete with new technologies and competitors;

•disruption to or failures of our SaaS-based ~~technology within certain of our service offerings~~or technology-enabled services, or our inability to adequately protect our intellectual property rights with respect to such ~~technology, which~~technologies or sufficiently protect the privacy of personal information, could reduce client satisfaction, harm our reputation and negatively affect our business;

•security breaches and cybersecurity incidents, including ransomware, that could compromise our information and systems, which could adversely affect our business operations and reputation and could subject us to substantial liabilities;

•any inability on our part to quickly and properly credential and match quality healthcare professionals with suitable placements, which may adversely affect demand for our services;

•any inability on our part to continue to attract, develop and retain our sales and operations team members, which may deteriorate our operations;

•our increasing dependence on third parties, including offshore vendors, for the execution of certain critical functions;

~~cybersecurity risks and cyber incidents, which could adversely affect our business or disrupt our operations;~~

~~any inability on our part to recruit and retain sufficient quality healthcare professionals at reasonable costs;~~

~~any inability on our part to properly screen and match quality healthcare professionals with suitable placements;~~

~~any inability on our part to successfully attract, develop and retain a sufficient number of quality sales and operations personnel;~~

•the loss of our key officers and management personnel, which could adversely affect our business and operating results;

•any inability to consummate and effectively incorporate acquisitions into our business operations, which may adversely affect our long-term growth and our results of operations;

•businesses we acquire may have liabilities or adverse operating issues, which could harm our operating results;

•any increase to our business and operating risks as we develop new services and clients, enter new lines of business, and focus more of our business on providing a full range of client solutions;

•any inability on our part to maintain our positive brand awareness and ~~identity;~~identity, which may adversely affect our results of operation;

~~any inability on~~•the expansion of social media platforms presents new risks and challenges, which could cause damage to our ~~part to consummate and effectively incorporate acquisitions into our business operations;~~brand reputation;

•any recognition ~~by us~~ of an impairment to the substantial amount of goodwill or indefinite-lived ~~intangibles;~~intangibles on our balance sheet;

•our indebtedness, which could adversely affect our ability to raise additional capital to fund operations, limit our ability to react to changes in the ~~effect of significant adverse adjustments by~~economy or our industry, and expose us to ~~our insurance-related accruals, which could decrease our earnings or increase our losses, as~~interest rate risk to the ~~case may be;~~extent of any variable rate debt;

~~our significant indebtedness and any inability on our part to generate sufficient cash flow to service our debt; and~~

•the terms of our debt instruments that impose restrictions on us that may affect our ability to successfully operate our ~~business.~~business; and

•the effect of significant adverse adjustments to our insurance-related accruals on our balance sheet, which could decrease our earnings or increase our losses and negatively impact our cash flows.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates, and commodity prices. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, our primary exposure to market risk was interest rate risk associated with our variable interest debt ~~instruments. In April 2015, we entered into an interest rate swap agreement to minimize~~instruments and our exposure to interest rate fluctuations on $100 million of our outstanding variable rate debt under one of our term loans for which we pay a fixed rate of 0.983% per annum and receive a variable rate equal to floating one-month LIBOR. In connection with the issuance and sale of the Notes and repayment of a portion of the Term Loans, we reduced the interest rate swap notional amount to $40 million in the fourth quarter of 2016. On May 3, 2017, we terminated the remaining interest rate swap after further repayment of the Term Loans. During the third quarter of 2017, we paid off the remaining balance of the Term Loans.investment portfolio. A 100 basis point increase in interest rates on our variable rate debt would

not have resulted in a material effect on our unaudited condensed consolidated financial statements for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017.~~ 2023. A 100 basis point change in interest rates as of June 30, 2023 would not have resulted in a material effect on the fair value of our investment portfolio. For our investments that are classified as available-for-sale, unrealized gains or losses related to fluctuations in market volatility and interest rates are reflected within stockholders’ equity in accumulated other comprehensive loss in the consolidated balance sheets. Such unrealized losses would be realized only if we sell the investments prior to maturity.

During the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, we generated substantially all of our revenue in the United States. Accordingly, we believe that our foreign currency risk is immaterial.

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Item 4. Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as of ~~September~~June 30, ~~2017~~2023 were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting that occurred during the quarter ended ~~September~~June 30, ~~2017~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

~~None.~~Information with respect to this item may be found in the accompanying Note (9), “Commitments and Contingencies,” which is incorporated herein by reference.

Item 1A. Risk Factors

We do not believe that there have been any material changes to the risk factors disclosed in Part I, Item 1A of our ~~2016~~2022 Annual Report. The risk factors described in our 2022 Annual Report are not the only risks we face. Factors we currently do not know, factors that we currently consider immaterial or factors that are not specific to us, such as general economic conditions, may also materially adversely affect our business or our consolidated operating results, financial condition or cash flows.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~None.~~From time to time, we may repurchase our common stock in the open market pursuant to programs approved by our board of directors (the “Board”). On November 1, 2016, our Board authorized us to repurchase up to $150.0 million of our outstanding common stock in the open market. On November 10, 2021, February 17, 2022 and June 15, 2022, we announced increases to the repurchase program totaling $700.0 million. Additionally, on February 16, 2023, we announced an increase of $500.0 million for a total of $1,350.0 million of repurchase authorization as of June 30, 2023. Under the repurchase program announced on November 1, 2016 and the aforementioned increases (collectively, the “Company Repurchase Program”), share repurchases may be made from time to time, depending on prevailing market conditions and other considerations. The Company Repurchase Program has no expiration date and may be discontinued or suspended at any time.

On May 8, 2023, we entered into an accelerated share repurchase (“ASR”) agreement with a counterparty whereupon we prepaid $200.0 million and received an initial delivery of 1.8 million shares of our common stock, which was 80% of the prepayment amount based on a price of $90.89 per share. Under the terms of the ASR, the total number of shares delivered and average price per share will be determined upon settlement based on the volume weighted average price over the term of the ASR agreement, less an agreed upon discount and subject to customary acceleration adjustments. The final settlement of the ASR will be completed no later than the fourth quarter of 2023, subject to acceleration at the counterparty’s discretion, which could be completed as early as the third quarter of 2023.

During the six months ended June 30, 2023, exclusive of the initial delivery of shares under the ASR, we repurchased approximately 2.4 million shares of common stock at an average price of $95.13 per share excluding broker’s fees, resulting in an aggregate purchase price of $224.7 million excluding the effect of excise taxes, funded through cash on hand and borrowings under our secured revolving credit facility. We describe in further detail the Company Repurchase Program and the shares repurchased thereunder in Part II, Item 5, “Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” and Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (10)(b), Capital Stock—Treasury Stock” set forth in our 2022 Annual Report.

The following table presents repurchases of our common stock, which excludes the effect of excise taxes, during the six months ended June 30, 2023:


Period	Total Number of Shares (or Units) Purchased	Average Price Paid per Share (or Unit)	Total Number of Shares (or Units) Purchased as Part of Publicly Announced Program	Maximum Dollar Value of Shares (or Units) that May Yet Be Purchased Under the Program
January 1 - 31, 2023	922,516	$108.40	922,516	$	51,374,511
February 1 - 28, 2023	187,031	$93.83	187,031	$	533,820,512
March 1 - 31, 2023	658,402	$86.79	658,402	$	476,658,438
April 1 - 30, 2023	550,245	$84.02	550,245	$	430,412,324
May 1 - 31, 2023 (a)	1,803,863	$90.78	1,803,863	$	226,658,470
June 1 - 30, 2023	—	$—	—	$	226,658,470




Total	4,122,057	$93.32	4,122,057	$	226,658,470

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(a) The number of shares repurchased during May 1 - 31, 2023 includes the initial delivery of 1.8 million shares under the ASR agreement, and the average price paid per share reflects the ASR prepayment’s $90.89 per share basis. Additionally, the remaining $226.7 million that may yet be repurchased under the Company Repurchase Program reflects the full effect of the $200.0 million ASR prepayment.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

~~None.~~During the three months ended June 30, 2023, none of the Company’s directors or officers adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” as such terms are defined under Item 408 of Regulation S-K.

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Item 6. Exhibits



Exhibit Number						Description

31.1						Certification by ~~Susan R. Salka~~Caroline S. Grace pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.*

31.2						Certification by ~~Brian M. Scott~~Jeffrey R. Knudson pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.*

32.1						Certification by ~~Susan R. Salka~~Caroline S. Grace pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

32.2						Certification by ~~Brian M. Scott~~Jeffrey R. Knudson pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

101.INS						XBRL Instance Document.*

101.SCH						XBRL Taxonomy Extension Schema Document.*

101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document.*

101.DEF						XBRL Taxonomy Extension Definition Linkbase Document.*

101.LAB						XBRL Taxonomy Extension Label Linkbase Document.*

101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document.*


*						Filed herewith.


*						~~Filed herewith.~~

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: ~~November 3, 2017~~August 4, 2023


AMN HEALTHCARE SERVICES, INC.

/S/ CAROLINE S. GRACE
Caroline S. Grace President and Chief Executive Officer (Principal Executive Officer)

Date: August 4, 2023


~~AMN HEALTHCARE SERVICES, INC.~~

/S/ S~~USAN~~JEFFREY R. S~~ALKA~~KNUDSON
~~Susan~~Jeffrey R. ~~Salka~~ ~~President~~Knudson Chief Financial Officer (Principal Financial and ~~Chief Executive Officer~~ ~~(Principal Executive~~Accounting Officer)

~~Date:~~ ~~November 3, 2017~~

/S~~/ BRIAN~~ ~~M. SCOTT~~

~~Brian M. Scott~~

~~Chief Accounting Officer,~~

~~Chief Financial Officer and Treasurer~~

~~(Principal Accounting and Financial Officer)~~



	September 30, 2017			December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents	$	19,625		$	10,622
Accounts receivable, net of allowances of $11,381 and $11,376 at September 30, 2017 and December 31, 2016, respectively	343,596			341,977
Accounts receivable, subcontractor	37,200			49,233
Prepaid expenses	15,832			14,189
Other current assets	26,220			34,607
Total current assets	442,473			450,628
Restricted cash, cash equivalents and investments	34,380			31,287
Fixed assets, net of accumulated depreciation of $94,531 and $84,865 at September 30, 2017 and December 31, 2016, respectively	68,188			59,954
Other assets	73,962			57,534
Goodwill	340,596			341,754
Intangible assets, net of accumulated amortization of $85,990 and $72,057 at September 30, 2017 and December 31, 2016, respectively	231,791			245,724
Total assets	$	1,191,390		$	1,186,881
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	117,934		$	137,512
Accrued compensation and benefits	111,984			107,993
Current portion of notes payable, less unamortized fees	—			3,750
Deferred revenue	9,609			8,924
Other current liabilities	5,440			16,611
Total current liabilities	244,967			274,790

Notes payable, less unamortized fees	319,652			359,192
Deferred income taxes, net	11,899			21,420
Other long-term liabilities	82,673			82,096
Total liabilities	659,191			737,498
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value; 10,000 shares authorized; none issued and outstanding at September 30, 2017 and December 31, 2016	—			—
Common stock, $0.01 par value; 200,000 shares authorized; 48,402 issued and 47,772 outstanding, respectively, at September 30, 2017 and 48,055 issued and 47,612 outstanding, respectively, at December 31, 2016	484			481
Additional paid-in capital	451,136			452,491
Treasury stock, at cost (630 and 443 shares at September 30, 2017 and December 31, 2016, respectively)	(20,358		)	(13,261		)
Retained earnings	101,062			9,671
Accumulated other comprehensive income (loss)	(125		)	1
Total stockholders’ equity	532,199			449,383
Total liabilities and stockholders’ equity	$	1,191,390		$	1,186,881

~~For the quarterly period ended September 30, 2017~~OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~For the transition period from~~ to