AMN 10-K & 10-Q changes, risk factors and insider trading

The repeal of or significantchanges erosion ofto the Patient Protection and Affordable Care Act (“ACA”) without a corresponding replacement may negatively affect the demand for our services.

InSince its enactment in 2010, the adoption of the ACA broughthas significantsignificantly reformsexpanded access to the health careinsurance, systemresulting that included, among other things,in a requirementsubstantial thatreduction all individuals have health insurance (with limited exceptions). As a result of the ACA,in the uninsured population has declined significantly.population. If there is a rollback of aspects of the ACA, such as Medicaid expansion, or expiration of subsidies, or changes to eligibility and enrollment rules or reduced access to tax credits, it may lead to a reduction in demand for healthcare services and the demand for our services may decline.

Like all employers, we must also comply with various laws and regulations relating to employment and pay practices and from time to time have been or may in the future be subject to individual, representative and class action lawsuits related to alleged wage and hour violations under California and Federal law. We are subject to possible claims alleging discrimination, sexual harassment and other similar activities in which we or our hospital and healthcare facility clients and their agents have allegedly engaged. We are also subject to examination of our payroll practices from various federal and state taxation authorities from time to time. While we believe that our employment and pay practices materially comply with relevant laws and regulations, interpretations of these laws change. Because of the nature of our business, the impact of these employment and payroll laws and regulations may have a more pronounced effect on our business. There is a risk that we could be subject to payment of significant additional wages, insurance and employment, and payroll-related taxes and sizeable statutory penalties negatively impacting our financial position, results of operations and cash flows. These laws and regulations may also impede our ability to grow the size and profitability of our operations. In addition, our involvement in these matters and any related adverse rulings may result in increased costs and expenses, cause us from time to time to significantly increase our legal accruals and/or modify our pay practices, all of which would likely have an adverse impact on our financial performance and profitability.

In our international nurse business, we recruit registered nurses from outside of the United States who rely on visas to be eligible to be placed or hired directly with healthcare facilities. Visa retrogression, where the date(s) that determine availability for applying for a visa are moved to a later date, has had and may in the future have a negative impact on our international nursing volumes. Additionally, other changes in immigration policy, laws and processes or uncertainty about such policies or uncertainty about enforcement of such policies could also negatively impact other aspects of our business, including demand for our Language Services business, and our financial performance.

The performance, reliability and security of our technology-enabled services, including our language interpretation services and SaaS-based technologies, such as AMN Language Services, ShiftWise Flex, Medefis, and b4health, our Event Management System and Avantasclinician Smartfacing Squareapp, AMN Passport, are critical to such offerings’ operations, reputation and ability to attract new clients.clients and clinicians. Some of our clients rely on our SaaS-based technologies to perform certain of their operational functions. Accordingly, any degradation, errors, defects, disruptions or other performance problems with our SaaS-based technologies could damage our or our clients’ operations and reputations and negatively affect our business. If any of these problems occur, our clients may, among other things, terminate their agreements with us or make indemnification or other claims against us, which may also negatively affect us.

Security breaches, including cyber incidents can result from deliberate attacks or unintentional events. These incidents can include, but are not limited to, gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, ransomware attacks, corrupting data, or causing operational disruption. In the ordinary course of our business, we collect and store sensitive data, such as our proprietary business information and that of our clients as well as personally identifiable information of our healthcare professionals and team members, including full names, social security numbers, addresses, birth dates and payroll-related information,members in our data centers, on our networks and in hosted SaaS-based solutions provided by third parties. Our employees and third-party vendors may also have access to, receive and use personal health information in the ordinary course of our business. The secure access to, processing, maintenance and transmission of this information is critical to our operations.

Despite our security measures and business controls, our information technology and infrastructure, including the third party SaaS-based technology in which we store personally identifiable information and other sensitive information of our healthcare professionals may be vulnerable to attacks by hackers, breached due to third-party vendor and/or employee error, malfeasance or other disruptions such as ransomware or subject to the inadvertent or intentional unauthorized release of information. The Company has experienced cyber threats resulting in immaterial cyber incidents and expects cyber threats to continue with varying levels of sophistication. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may not immediately produce signs of intrusion, we may be unable to anticipate these incidents or techniques, timely discover them, or implement adequate preventative measures. Our information technology and other security protocols may not provide sufficient protection, and as a result a security breach could compromise our networks and significant information about us, our employees, healthcare professionals, patients or clients may be accessed, disclosed, lost or stolen. In a situation such as ransomware attack, our access to critical business information and ability to conduct business may be interrupted or impaired. Further, unauthorized use or misuse of AI by the Company’s employees, vendors or others may result in system failures, disruption to business processes, potential misuse of proprietary confidential information, infringement on third-party rights, or disclosure of confidential Company and customer data. The Company’s use of AI may also lead to novel and urgent cybersecurity risks, including access to or the misuse of personal data.

We maintain goodwill on our balance sheet, which represents the excess of the total purchase price of our acquisitions over the fair value of the net assets and intangible assets we acquired. We evaluate goodwill and intangible assets for impairment annually or when evidence of potential impairment exists, respectively. If we identify an impairment, we record a non-cash charge to earnings. During the year ended December 31, 2024,2025, we recognized a goodwill impairment lossesloss totaling $222.5$109.5 million.million and a long-lived assets impairment loss totaling $18.3 million . See additional information in “Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (45), Goodwill and Identifiable Intangible Assets.” We may have additional impairment losses in connection with our periodic evaluation of our goodwill and intangible assets. In the event of further impairment, a non-cash impairment charge could have a material adverse effect on our results of operations and balance sheet.

We maintain accruals related to legal matters, our captive insurance company and self-insured retentions for various lines of insurance coverage, including professional liability, employment practices, health insurance and workers’ compensation on our balance sheet. We determine the adequacy of our accruals by evaluating legal matters, our historical experience and trends, related to both insurance claims and payments, information provided to us by our insurance brokers, attorneys, third-party administrators and actuarial firms as well as industry experience and trends. If such information collectively indicates that our accruals are understated, we provide for additional accruals;accruals. aA significant increase to these accruals would decrease our earnings.

We provide technology-enabled healthcare workforce solutions and staffing services to healthcare organizations across the nation. The Company provides access to a comprehensive network of healthcare professionals through its recruitment strategies and breadth of career opportunities. We help providers optimize their workforce to reduce complexity and increase efficiency. Our total talent solutions include vendor neutral and managed services programs (“MSP”), clinical and interim healthcare leaders, temporary staffing, permanent placement, executive search, vendor management systems (“VMS”), recruitment process outsourcing, predictive modeling, language services, revenue cycle solutions, labor disruption and other services. Clients include acute-care hospitals, community health centers and clinics, physician practice groups, retail and urgent care centers, home health facilities, schools and many other healthcare settings.

Through our physician and leadership solutions segment, we place physicians of all specialties, as well as dentists and advanced practice providers, with clients on a temporary basis, generally as independent contractors. We also recruit physicians and healthcare leaders and executives for permanent placement and place interim leaders and executives across all healthcare settings. The interim healthcare leaders and executives we place are typically placed on contracts with assignment lengths ranging from a few days to one year.

Through our technology and workforce solutions segment, we provide hospitals and other healthcare facilities with a range of workforce solutions, including: (1) language services, (2) software-as-a-service (“SaaS”)-based VMS technologies through which our clients can self-manage the procurement of contingent clinical labor and their internal float pool, (3) workforce optimization services that include consulting,advisory, data analytics, predictive modeling,planning, and SaaS-based scheduling technology,analytics, and (4) recruitment process outsourcing services in which we recruit, hire and/or onboard permanent clinical and nonclinical positions on behalf of our clients.

For the year ended December 31, 2024,2025, we recorded revenue of $2,983.8$2,730.4 million, as compared to $3,789.3$2,983.8 million for 2023.2024. We recorded net incomeloss of $(loss95.7) ofmillion for 2025, as compared to $(147.0) million for 2024, as compared to $210.7 million for 2023.2024. Nurse and allied solutions segment revenue comprised 61%60% and 69%61% of total consolidated revenue for the years ended December 31, 20242025 and 2023,2024, respectively. Physician and leadership solutions segment revenue comprised 24%26% and 18%24% of total consolidated revenue for the years ended December 31, 20242025 and 2023,2024, respectively. Technology and workforce solutions segment revenue comprised 15%14% and 13%15% of total consolidated revenue for the years ended December 31, 20242025 and 2023,2024, respectively. For a description of the services we provide under each of our business segments, please see, “Item 1. Business—Our Services.”

Over the last several years, we have worked to execute on our management strategies and intend to continue to do so in the future. As part of our long-term growth strategy to add value for our clients, healthcare professionals, and stockholders, we acquired MSI Systems Corp. and DrWanted.com LLC (together “MSDR”) on November 30, 2023 and Connetics on May 13, 2022.2023. See additional information in “Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (2), Acquisitions.”

Staffing volumes for our nurse and allied solutions segment duringin the fourth quarter were flathigher to thethan prior quarter after sequential declines throughoutin 2023the second and 2024.third Visaquarters. retrogressionThe hasincrease negativelyin impactedstaffing volume was due to strong winter orders and volume in travel nursing, seasonal growth in allied staffing for schools, and a return to modest growth of the international nurse volumes,business whichafter wenine expectquarters toof continue into next year.decline. Additionally, we supported a significant labor disruption event in the fourth quarter,quarter which favorably impacted the segment’s revenue. Bill rates for the nurse and allied solutions segment in the fourth quarter were flatslightly tohigher thethan prior quarter afterand aflat modestcompared sequentialto decline,prior whichyear, we believe indicatesindicating stabilization of market rates.

In our physician and leadership solutions segment, demand for our locum tenens staffing business in the fourth quarter declinedincreased from the prior yearquarter though itand was higherin comparedline with the prior quarter.year. Certified registered nurse anesthetists (CRNAs) continue to be the largest specialty for our locum tenens staffing business. Revenue per day filled increased in the fourth quarter as compared to both the prior year and prior quarter.quarter Demandwhile fordays ourfilled interimwere leadershiplower compared to prior quarter and searchprior businessesyear. Demand in the fourth quarter was below prior year, but demand in ourfor interim leadership business was uphigher compared to prior year but lower sequentially. Demand for theseour search business was lower as compared to prior year and prior quarter. Both businesses hashave been impacted by healthcare organizations deferring hiring decisions or increasing insourcing.

In our technology and workforce solutions segment, our language services business continuedexperienced toa experienceseasonal an increasedrop in minutes fromsequentially ourin existingthe clientsfourth quarter, but minutes for the full year were higher than prior year. Ongoing pricing pressure for language services is expected due to increased market competition. Volumes and growthbill from new clients. Volumesrates in our VMS business followedwere similarboth trends as our travel nurse business aslower compared to the prior year and prior quarter. VMS bill rates in the fourth quarter were down sequentially and year over year.

The following table sets forth, for the periods indicated, certain statements of operations data as a percentage of revenue. Our results of operations include three reportable segments: (1) nurse and allied solutions, (2) physician and leadership solutions, and (3) technology and workforce solutions. The acquisitionsacquisition and sale of disposal group during the three years ended December 31, 20242025 impact the comparability of the results between the years presented. See additional information in “Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (2), Acquisitions.Acquisitions and Note (3), Sale of Disposal Group.” Our historical results are not necessarily indicative of our results of operations to be expected in the future.

Historically, our primary liquidity requirements have been for acquisitions, working capital requirements, and debt service under our credit facilities and senior notes. We have funded these requirements through internally generated cash flow and funds borrowed under our credit facilities and senior notes. During the fourth quarter of 2025, we redeemed the entire outstanding $500.0 million aggregate principal amount of our 4.625% senior notes due 2027 (“the 2027 Notes”).

As of December 31, 2024,2025, (1) $210.0$25.0 million was drawn with $519.6$404.8 million of available credit under the Senior Credit Facility (as defined below), (2) the aggregate principal amount of our 20272029 Notes (as defined below) outstanding was $500.0$350.0 million, and (3) the aggregate principal amount of our 20292031 Notes (as defined below) outstanding was $350.0$400.0 million. As of December 31, 2024,2025, we were in compliance with the various covenants under our debt instruments. We describe in further detail our Amended Credit Agreement (as defined below), under which our Senior Credit Facility is governed, the 20272029 Notes,Notes and the 20292031 Notes in “Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (89), Notes Payable and Credit Agreement.”

Net cash provided by (used in) investing activities for 2024,2025, 2024 and 2023 and 2022 was $79.9$4.3 million, $412.5$(79.9) million and $170.7$(412.5) million, respectively. The year-over-year decreasechange from 20232024 to 20242025 in net cash provided by (used in) investing activities was primarily attributable to (1) noproceeds cashfrom paidthe forsale acquisitionsof disposal group of $65.3 million in 20242025, (2) a net purchase of investments of $25.4 million in 2025 as compared to $292.2net proceeds of investments of $7.7 million in 20232024, and (23) $8.4$6.4 million of payments to fund the deferred compensation plan that were offset with $6.4 million of proceeds from settlements of company-owned life insurance policies in 20242025 as compared to $24.9$8.4 million of payments in 2023.2024. In addition, capital expenditures were $80.9$35.6 million, $103.7$80.9 million and $75.8$103.7 million for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively. Our capital expenditures in recent years were primarily related to ongoing technology investments to support our tech-centric total talent solutions initiatives and to optimize our internal front and back-office systems.

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, the first amendment and the second amendment, collectively, the “Amended Credit Agreement”) provides for, among other things, an increase to the secured revolving credit facility (the “Senior Credit Facility”) from $400.0 million to $750.0 million. The Senior Credit Facility includes a $125.0 million sublimit for the issuance of letters of credit and a $75.0 million sublimit for swingline loans. On November 5, 2024, we entered into the fourth amendment to our credit agreement (the “Fourth Amendment”) which increased our consolidated net leverage ratio covenant for the year ending December 31, 2025. Our obligations under the Amended Credit Agreement are secured by substantially all of our assets. The terms of the Amended Credit Agreement, including maturity dates, payment and interest terms, are described in further detail in “Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (8), Notes Payable and Credit Agreement.”

We conduct business through three reportable segments: (1) nurse and allied solutions, (2) physician and leadership solutions, and (3) technology and workforce solutions. For the three months ended MarchJune 31,30, 2026, we recorded revenue of $1,378.4$673.2 million, as compared to $689.5$658.2 million for the same period last year. For the six months ended June 30, 2026, we recorded revenue of $2,051.6 million, as compared to $1,347.7 million for the same period last year.

Nurse and allied solutions segment revenue comprised 82%76% and 60%59% of total consolidated revenue for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. Through our nurse and allied solutions segment, we provide hospitals, other healthcare facilities, and schools with a comprehensive set of staffing solutions, including direct, vendor-neutral, and managed services solutions in which we manage and staff all the temporary and permanent nursing and allied staffing needs, as well as the revenue cycle management needs, of a client. A majority of our placements in this segment are under our managed services solution.

Physician and leadership solutions segment revenue comprised 12%16% and 25%26% of total consolidated revenue for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. Through our physician and leadership solutions segment, we place physicians of all specialties, as well as dentists and advanced practice providers, with clients on a temporary basis, generally as independent contractors. We also recruit physicians and healthcare leaders for permanent placement and place interim leaders and executives on variable-length assignments across all healthcare settings.

Technology and workforce solutions segment revenue comprised 6%8% and 15% of total consolidated revenue for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. Through our technology and workforce solutions segment, we provide hospitals and other healthcare facilities with a range of workforce solutions, including: (1) language services, (2) software-as-a-service (“SaaS”)-based VMS technologies through which our clients can self-manage the procurement of contingent clinical labor and their internal float pool, (3) workforce optimization services that include advisory, planning, and analytics, and (4) recruitment process outsourcing services in which we recruit, hire and/or onboard permanent clinical and nonclinical positions on behalf of our clients.

During the first quarter, theThe nurse and allied solutions segment experiencedincluded substantial labor disruption staffing activity. We supplied thousands of clinicians to enable clients to maintain continuity of care amid multiple simultaneous large scale labor disruption events. Investmentsrevenue in technology and processes over several years enabled the Company to effectively meet client needs throughout extended events during thefirst quarter. The travel nurse division also was also affectedimpacted by thesethe labor disruptions,disruption resultingevents, inwith heightened demand for rapid response nurses at elevated bill rates.rates in the first quarter. While demandlabor disruption and travel nurse revenue was lower sequentially in the second quarter, we are seeing positive trends in our base travel nurse business. Demand for travel nurses decreasedincreased compared to the prior year,quarter and prior year along with increases in the percentage of orders filled increased,filled, and as a result, traveler volume was higher than prior year. The international nurse business continued its sequential growth and year-over-year growth in the firstsecond quarter with recentstrong visatraveler bulletinsand increasingdirect ourplacement number of visa-eligible candidates to be placed.growth. Allied staffing experiencedcontinued to experience sequential increases in demand during the firstsecond quarter, consistent with the previous year, with volume demonstrating growthstrong bothyear-over-year sequentially and year over year.growth.

In our physician and leadership solutions segment, demand for our locum tenens staffing business in the firstsecond quarter increased slightly from prior year and prior quarter. Days filled were lower compared to prior year but decreasedup slightly sequentially. Revenue per day filled was in line with prior year but was down sequentially. Certified registered nurse anesthetists (CRNAs) continue to be the largest specialty for our locum tenens staffing business. Revenue per day filled increased in the first quarter as compared to the prior year but was down sequentially. Days filled were lower compared to both prior year and prior quarter. DemandVolume for our search business in the firstsecond quarter was lowerhigher compared to prior year and prior quarter, althoughwith searchparticular revenuestrength increasedin fromphysician thepermanent priorplacement year.and executive search. Demand for interim leadership was higherlower compared to prior year but lowerhigher sequentially. Both businesses have been impacted by healthcare organizations deferring hiring decisions or increasing insourcing.

In our technology and workforce solutions segment, firstsecond quarter minutes in our language services business were slightlyin downline as compared towith prior year and slightly up ashigher compared to prior quarter. Ongoing pricing pressure for language services iscontinues expectedto be a headwind due to increased market competition. VolumesVolume in our VMS business declined both sequentially and compared to prior year.year and prior quarter.

Comparison of Results for the Three Months Ended MarchJune 31,30, 2026 to the Three Months Ended MarchJune 31,30, 2025

Revenue. Revenue increased 100%2% to $1,378.4$673.2 million for the three months ended MarchJune 31,30, 2026 from $689.5$658.2 million for the same period in 2025, attributable to higher revenue in our nurse and allied solutions segment. Revenue broken down among the reportable segments is as follows:

Nurse and allied solutions segment revenue increased 173%11% to $1,127.3$422.0 million for the three months ended MarchJune 31,30, 2026 from $413.3$381.9 million for the same period in 2025. The $714.0$40.1 million increase was primarily attributable to a $683.0$20.3 million increase driven by a 6% increase in the average number of travelers on assignment, a $10.0 million increase in labor disruption revenue related to reserve releases and billing true ups from multiple large scale labor disruption events that we supported in the currentprior quarter,periods, an $8.6 million increase driven by non-volume revenue, and a $21.0$3.3 million increase driven by a 6%1% increase in the average billbillable rate and an $10.0 million increase driven by a 3% increase in the average number of travelers on assignment.hours.

Physician and leadership solutions segment revenue decreased 6% to $163.9$164.6 million for the three months ended MarchJune 31,30, 2026 from $174.1$174.5 million for the same period in 2025. The $10.2$9.9 million decrease was primarily attributable to a decline inlower revenue in our locum tenens business, partially offset by higher revenue in our physician permanent placement and executive search business ofwithin $9.7the segment. Revenue in our locum tenens business declined $11.8 million (or 7%8%) due to a $12.9$12.1 million decline drivenfrom byan a 9%8% decrease in the number of days filled,filled. partiallyOur offsetphysician bypermanent aplacement $3.2and executive search business increased $2.5 million increase(or driven26.7%) byprimarily adue 3%to increasehigher new search volume in the revenue per day filled.quarter.

Technology and workforce solutions segment revenue decreased 15% to $87.1$86.7 million for the three months ended MarchJune 31,30, 2026 from $102.2$101.8 million for the same period in 2025. The $15.1 million decrease was primarily attributable to declines in our ongoing businesses and a service line divestiture. Revenue for our VMS business declined $3.5 million (or 18%) due to lower staffing utilization on the platforms along with several client losses. Our language services business declined $6.0$6.1 million (or 8%) primarily due to lower pricing, and our other technology business declined $4.4$4.3 million (or 100%) primarily due to the sale of our Smart Square scheduling software in the third quarter of 2025.2025, and our VMS business declined $3.9 million (or 20%) due to lower staffing utilization on the platforms along with several client losses.

For the three months ended MarchJune 31,30, 2026 and 2025, revenue under our MSP arrangements comprised approximately 74%46% and 44% of consolidated revenue, 88%66% and 65%68% of nurse and allied solutions segment revenue, 18%19% and 18%17% of physician and leadership solutions segment revenue, and 1% and 3% of technology and workforce solutions segment revenue, respectively.

Cost of Revenue. Cost of revenue, which consists predominantly of compensation, benefits, housing, travel and allowance costs for healthcare professionals and medically qualified interpreters, increased 105%1% to $1,009.5$467.4 million for the three months ended MarchJune 31,30, 2026 from $491.4$461.8 million for the same period in 2025. The $518.1$5.6 million increase was primarily attributable to the increase in our nurse and allied solutions segment. Cost of revenue broken down among the reportable segments is as follows:

The increase in our nurse and allied solutions segment was primarily attributable to a $520.2$9.3 million increase in clinician pay package costs, including housing, travel and allowances, primarily due to the increase in laborthe disruptionaverage activities.number of travelers on assignment.

Gross Profit. Gross profit increased 86%5% to $368.8$205.9 million for the three months ended MarchJune 31,30, 2026 from $198.1$196.4 million for the same period in 2025, representing gross margins of 26.8%30.6% and 28.7%,29.8%, respectively. The declineincrease in consolidated gross margin for the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025, was primarily due to higher margin in our nurse and allied solutions segment driven by reserve releases and billing true ups from multiple large scale labor disruption events that we supported in the prior periods. The overall increase was partially offset by (1) a lower margin in our physician and leadership solutions segment driven by increases in sales reserve and allowances and (2) a lower margin in our technology and workforce solutions segment primarily due to lower bill rates in our language services business due to increased market competition, a shift in sales mix resulting from reduced revenue in our higher-margin VMS business, and the sale of our Smart Square scheduling software. The overall decrease was partially offset by a revenue mix shift to higher margin labor disruption business in our nurse and allied solutions segment. Gross margin by reportable segment for the three months ended MarchJune 31,30, 2026 and 2025 was 25.1%28.4% and 22.7%23.9% for nurse and allied solutions, 26.1%26.5% and 27.3%28.2% for physician and leadership solutions, and 50.0%48.6% and 55.5%55.1% for technology and workforce solutions, respectively. Gross profit broken down among the reportable segments is as follows:

Selling, General and Administrative Expenses. Selling, general and administrative (“SG&A”) expenses consist predominantly of compensation and benefits costs for corporate employees, in addition to professional service fees, legal matter accruals and other overhead costs. SG&A expenses were $218.4$147.4 million, representing 15.8%21.9% of revenue, for the three months ended MarchJune 31,30, 2026, as compared to $147.7$154.6 million, representing 21.4%23.5% of revenue, for the same period in 2025. The increasedecrease in SG&A expenses was primarily due to a $45.4$5.8 million increase in employee compensation and benefits (inclusive of share-based compensation) and a $17.0 million increase in other expenses primarily in support of the large labor disruption eventsdecrease in the quarter.provision for expected credit losses. SG&A expenses broken down among the reportable segments, unallocated corporate overhead, and share-based compensation are as follows:

Depreciation and Amortization Expenses. Amortization expense decreased 8%11% to $17.9$17.5 million for the three months ended MarchJune 31,30, 2026 from $19.4$19.6 million for the same period in 2025, primarily attributable to having more intangible assets fully amortized during the three months ended MarchJune 31,30, 2026. Depreciation expense (exclusive of depreciation included in cost of revenue) decreased 17%23% to $15.3$14.1 million for the three months ended MarchJune 31,30, 2026 from $18.5$18.1 million for the same period in 2025, primarily attributable to the mix of depreciable assets and their useful lives. Additionally, $2.4$2.5 million and $2.0$2.1 million of depreciation expense for our language services business is included in cost of revenue for the three months ended MarchJune 31,30, 2026 and 2025, respectively.

Interest Expense, Net, and Other. Interest expense, net, and other was $6.7$7.0 million during the three months ended MarchJune 31,30, 2026 as compared to $12.3$11.4 million for the same period in 2025. The decrease was primarily due to a lower average debt outstanding balance, as well as interest income earned on excess cash during the three months ended MarchJune 31,30, 2026.

Income Tax Expense.Benefit. Income tax expensebenefit was $48.3$(1.3) million for the three months ended MarchJune 31,30, 2026 as compared to $1.3$(18.9) million for the same period in 2025, reflecting effective income tax rates of 44%(6)% and 697%14% for these periods, respectively. The decrease in the effective income tax rate was primarily attributable to the recognition of $2.6$0.6 million of net discrete tax expense during the three months ended MarchJune 31,30, 2026 compared to a $1.3$0.9 million net discrete tax expense during the same period in 2025, along with a goodwill impairment loss recognized in the prior year, in relation to income (loss) before income taxes of $110.5$19.9 million and $0.2$(135) million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. We currently estimate our annual effective tax rate to be approximately 46%36% for 2026. The 44%(6)% effective tax rate for the three months ended MarchJune 31,30, 2026 differs from our estimated annual effective tax rate of 46%36% primarily due to certain discrete tax expensesbenefits recognized during the three months ended MarchJune 31,30, 2026, in relation to income before income taxes.

As of MarchJune 31,30, 2026, (1) no amount was drawn with $429.8$430.0 million of available credit under our $450.0 million secured revolving credit facility (the “Senior Credit Facility”), (2) the aggregate principal amount of our 4.000% senior notes due 2029 (the “2029 Notes”) outstanding was $350.0 million, and (3) the aggregate principal amount of our 6.500% senior notes due 2031 (the “2031 Notes”) outstanding was $400.0 million. We describe in further detail our Amended Credit Agreement (as defined below), under which the Senior Credit Facility is governed, the 2029 Notes, and the 2031 Notes in Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (9), Notes Payable and Credit Agreement” of our 2025 Annual Report.

As of MarchJune 31,30, 2026, the total of our contractual obligations under operating leases with initial terms in excess of one year was $40.1$38.0 million. We describe in further detail our operating lease arrangements in Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (6), Leases” of our 2025 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 our consolidated balance sheets. See additional information in the accompanying Note (6), “Fair Value Measurement,” Note (7), “Income Taxes,” Note (8), “Commitments and Contingencies,” and Note (9), “Balance Sheet Details.”

Net cash provided by operating activities for the threesix months ended MarchJune 31,30, 2026 was $562.5$372.5 million, compared to $92.7$171.2 million for the same period in 2025. The increase in net cash provided by operations was primarily attributable to (1) an increase in other liabilities between periods of $380.5 million primarily related to receipts of client deposits and related reserves, (2) a year-over-year increase in net income (loss) excluding non-cash items of $107.4$95.5 million primarily due to higher segment operating income in our nurse and allied solutions segment, (32) an increase in accruedother compensation and benefitsliabilities between periods of $41.0$91.2 million primarily related to ourreceipts laborof disruptionclient services,deposits and related reserves, (43) an increase in accounts payable and accrued expenses between periods of $25.8$37.9 million primarily due to the timing of payments.payments, and (4) an increase in accrued compensation and benefits between periods of $33.2 million primarily related to our labor disruption services.

The overall increase in net cash provided by operating activities was partially offset by (1) an increase in other current assets between periods of $45.2 million primarily due to subcontractor deposits related to labor disruption services in the current year and (2) an increase in accounts receivable and subcontractor receivables between periods of $41.6$52.4 million primarily due to the timing of collections.

Our Days Sales Outstanding (“DSO”) was 2652 days as of MarchJune 31,30, 2026, 47 days as of December 31, 2025, and 5554 days as of MarchJune 31,30, 2025; excluding our labor disruption business, DSO was 54 days, 56 days and 5856 days, respectively.

Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 was $7.5$19.7 million, compared to net cash used in investing activities of $26.0$46.6 million for the same period in 2025. The decrease was primarily due to a net purchaseproceeds of investments of $0.3$0.2 million during the threesix months ended MarchJune 31,30, 2026, as compared to a net purchase of $14.5$26.9 million during the threesix months ended MarchJune 31,30, 2025. In addition, capital expenditures were $7.2$15.8 million and $10.0$19.8 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively.

Net cash used in financing activities during the threesix months ended MarchJune 31,30, 2026 was $27.1$29.5 million, due to repayments of $25.0 million under the Senior Credit FacilityFacility, $2.3 million paid in connection with the repurchase of our common stock, and $2.1$2.2 million in cash paid for shares withheld for payroll taxes resulting from the vesting of employee equity awards. Net cash used in financing activities during the threesix months ended MarchJune 31,30, 2025 was $61.2$141.4 million, due to repayments of $95.0$185.0 million under the Senior Credit Facility and $1.2$1.4 million in cash paid for shares withheld for payroll taxes resulting from the vesting of employee equity awards, partially offset by borrowings of $35.0$45.0 million under the Senior Credit Facility.

At MarchJune 31,30, 2026, we maintained outstanding standby letters of credit totaling $20.8$20.7 million as collateral in relation to our workers’ compensation insurance agreements and a corporate office lease agreement. Of the $20.8$20.7 million of outstanding letters of credit, we have collateralized approximately $0.7 million in cash and cash equivalents and the remaining approximately $20.2$20.0 million is collateralized by the Senior Credit Facility. Outstanding standby letters of credit at December 31, 2025 totaled $20.8 million.

•the effects of the COVID-19 pandemic or any future pandemic or health crisis on our business, financial condition and results of operations;