Today, and thank you for standing by. Welcome to the AMN Healthcare First Quarter 2025 earnings call. At this time, all participants are in a listen-only mode. After this breaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You'll then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Randle Reece, Vice President of Investor Relations. Good afternoon, everyone. Welcome to AMN Healthcare's First Quarter 2025 earnings call. A replay of this webcast will be available at ir.amnhealthcare.com at the conclusion of this call. Remarks we make during this call about future expectations, projections, trends, plans, events, or circumstances constitute forward-looking statements. These statements reflect the company's current beliefs based upon information currently available to it. Our actual results may differ materially from those indicated by these forward-looking statements because of various factors and cautionary statements, including those identified in our most recently filed Forms 10-K and 10-Q, our earnings release, and subsequent filings with the SEC. The company does not intend to update guidance or any forward-looking statements provided today prior to its next earnings release. This call contains certain non-GAAP financial information. Information regarding and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release and on our financial reports page at ir. amnhealthcare.com. On the call with me today are Cary Grace, President and Chief Executive Officer, and Brian Scott, Chief Financial and Operating Officer. I will now turn the call over to Cary. Thank you, Randy, and welcome to our first quarter conference call. The AMN team showed off its energy and resourcefulness in the First Quarter, and the results for revenue and profit margins that exceeded the high end of guidance. Revenue of $690 million topped the high end of guidance by $10 million due to strength in our labor disruption, locum tenens, and allied businesses. Our other businesses on balance were in line with our revenue forecast. The company reported $64 million in adjusted EBITDA and another quarter of robust cash flow and debt reduction. Thank you to our healthcare professionals and the entire AMN team for delivering a solid start to the year. For the Second Quarter, our outlook for revenue and earnings compares well against consensus estimates with continued upside from labor disruption, locum tenens, and allied staffing revenue. We received $39 million in revenue from two labor disruption events in the first quarter, with continued activity in the Second Quarter. Increasingly, labor disruption has become a differentiated solution that supports an important client need. We have built the leading event management technology and strengthened our ability to manage labor disruption activities without interrupting the strong service quality in our core business. These differentiating capabilities have been greeted by a series of client wins and a large pipeline of opportunities, which could offer upside potential this year and next. Bookings for locum tenens picked up significantly in the first four months of the year. We expect locum tenens to have sequential revenue growth this quarter, with good momentum going into the rest of the year. Demand for allied business has grown mid-teens year over year. We continue to see healthy allied demand into this quarter and strong execution from our team. In our schools business, bookings for the next school year are trending towards year-over-year growth driven by strength in orders and candidate submissions. For our travel nurse business, revenue volume and bill rate were in line with our projections for the First Quarter. Our Second Quarter revenue outlook for travel nurse calls for relatively normal seasonality, and we continue to see both intense competition to fill orders and some orders priced at levels that no one is filling. We made strides year to date in stabilizing gross margins, which came down across our industry last year. Consolidated gross margin was 28.7% in the first quarter, slightly better than the high end of guidance. Nurse and Allied Solutions gross margin of 22.7% was 90 basis points better than consensus. Our gross margin performance benefited from some process changes that have enabled improved internal execution, and we just rolled out new technology that enhances recruiter productivity and faster speed to submission. We continue to invest in technology that improves our speed and fill rate, including AI tools that reduce costs and improve how we deliver our services. Our market-leading app for healthcare professionals, AMN Passport, has now been rolled out to locum tenens. The app has potential for valuable improvements to our physician engagement and support. Passport gives locum physicians the ability to submit their shift work in the app, which we expect to greatly speed the submission process, reduce errors, and improve physician satisfaction. We will continue to make enhancements to Passport to expand its capabilities and extend into other AMN service lines. AMN also is gaining momentum in enterprise sales. The company signed five new MSP and vendor-neutral wins last quarter, reflecting improvement in our win rate, and we are seeing strong client retention rates. While the selling environment remains highly competitive, we are seeing interest in solutions that combine technology and services to help clients build and sustain a high-quality and cost-effective workforce. We will complete the rollout of ShiftWise Flex to our client base next month. This powerful and versatile technology is a cornerstone of our new WorkWise staffing management, engagement, and optimization platform. WorkWise has drawn a positive reception from new and existing clients. WorkWise is another example of how our diverse set of solutions is positioned to serve clients and healthcare professionals across the spectrum of care. This diversification also has allowed AMN to maintain operating leverage that is superior to our competitors and generate cash flow to invest in the business while also reducing debt. We are pleased to receive industry recognition for innovation that measurably improves the quality and efficiency of care. Modern Healthcare recognized WorkWise and AMN Passport in its 2025 Innovators Award. AMN is the only talent solutions company to make this year's list of 15 innovative healthcare organizations. Congratulations to the AMN team, from those who develop and deploy our technology to everyone who has integrated these market-leading tools into our solutions to the benefit of healthcare professionals and clients. In the First Quarter, the company generated $93 million in operating cash flow, enabling us to reduce our revolving credit balance by $60 million and add $45 million cash to our balance sheet. We do not control all the factors that will determine the trajectory of our businesses after our solid start to the year. Demand has not recovered to pre-pandemic levels in several of our businesses, such as travel nurse, interim leadership, and search, and the ongoing low demand in nurse staffing also affects our VMS revenue. Cost consciousness among hospitals and health systems is not a new condition. We continue to be focused on winning new clients, expanding our relationships with current clients, and improving our fill rates in direct and vendor-neutral channels. Across our businesses, competitors continue to grapple for position while serving a universe of cost-conscious clients and GPOs. We are seeing heightened competition in language services, where industry consolidation has resulted in some large rivals, and price competition has intensified. On the other hand, we have already seen some clients who chose other vendors but, due to quality issues, returned to AMN. We hold a distinct advantage in our high-quality, cost-competitive solutions. After two years of extraordinary growth, slower growth in Spanish language volume may indicate some impact from the current political and regulatory environment. Our sales activity in language services is healthy, and revenue growth could improve later in 2025 as new winds ramp. Across the spectrum of care, from preventative to urgent, acute, and post-acute, we see clients with varying degrees of exposure to changes in tariffs and federal healthcare policies. Healthcare providers continue to be laser-focused on cost containment and the sustainability of their workforce amid continued growth in patient volumes. We have improved the ability of AMN to help clients find and implement the best solutions for optimizing labor-first quality, supply, and cost. I am confident that our focused expertise, diversified solutions, and high-quality service delivery will be increasingly valuable in the future as healthcare demand grows faster than supply. Now, I'll turn the call over to Brian for the details of our latest results and outlook. Thank you, Cary, and good afternoon, everyone. First quarter consolidated revenue was $690 million, above the high end of guidance driven primarily from better-than-expected performance in labor disruption, locums, and allies. Revenue was down 16% from the prior year and down 6% sequentially. Consolidated gross margin for the First Quarter was 28.7%, 10 basis points above the high end of our guidance range. Year-over-year, gross margin decreased 270 basis points, while sequentially gross margin was down 110 basis points. Consolidated SG&A expenses were $148 million compared with $175 million in the prior year and $159 million in the previous quarter. Adjusted SG&A, which excludes certain expenses, was $136 million in the First Quarter, or 19.7% of revenue, compared with $162 million, or 19.7% of revenue in the prior year, and $145 million, or 19.8% of revenue in the previous quarter. The year-over-year SG&A decline was primarily due to lower employee headcount and variable compensation, along with reduced consulting and bad debt expenses. The sequential decrease was mainly a result of lower compensation expense and favorable bonus and related accrual adjustments. First quarter nurse and allied revenue was $413 million, down 20% from the prior year, primarily from lower volume and rates, partially offset by increased labor disruption revenue. Sequentially, segment revenue was down 9%, mainly driven by lower labor disruption revenue, a modest volume decline, and two fewer days. Year-over-year, segment volume decreased 22%. Average rate was down 5%, and average hours worked was down 1%. Sequentially, volume was down 2%, and the average rate and hours worked were both 1% higher. Travel nurse revenue in the First Quarter was $215 million, a decrease of 36% from the prior year period and 6% from the prior quarter. Allied revenue in the quarter was $147 million, down 13% year-over-year and 1% sequentially. Nurse and allied gross margin in the First Quarter was 22.7%, a decrease of 240 basis points year-over-year, mainly driven by higher housing and per diem reimbursements. Sequentially, gross margin was down 110 basis points due mainly to favorable sales adjustments recorded in the prior quarter. Segment operating margin of 7.8% decreased 250 basis points year-over-year and 80 basis points sequentially, driven in large part from the lower gross margin. Moving to Physician and Leadership Solutions segment, First Quarter revenue was $174 million, decreasing 8% year-over-year, driven by lower volume across all businesses, partially offset by bill rate growth and locums. Sequentially, revenue increased 1% on growth in locums. Locum tenens revenue in the quarter was $141 million, down 3% year-over-year and up 3% sequentially. Interim leadership revenue of $24 million decreased 21% from the prior year period and 9% sequentially. Search revenue of $9 million was down 29% year-over-year and 8% sequentially. Gross margin for the Physician and Leadership Solutions segment was 27.3%, down 430 basis points year-over-year, attributable to a lower bill pay spread in locum tenens and an unfavorable revenue mix shift. Sequentially, gross margin decreased 120 basis points, mainly due to an unfavorable revenue mix and lower margin in the interim business. Segment operating margin was 8.3%, which decreased 350 basis points year-over-year, primarily due to the lower gross margin and deleveraging of SG&A expenses, partially offset by lower bad debt expense. Sequentially, operating margin decreased 150 basis points, driven by the lower gross margin. Technology and Workforce Solutions revenue for the First Quarter was $102 million, down 9% year-over-year, as growth in language services was more than offset by decreases in VMS and outsourced solutions. Sequentially, revenue was down 4%. Language services revenue for the quarter was $75 million, an increase of 5% year-over-year and down 2% sequentially. VMS revenue in the quarter was $19 million, a decrease of 33% year-over-year and 14% sequentially. Segment gross margin was 55.5%, down 440 basis points from the prior year period, primarily due to the lower revenue mix from VMS and outsourced solutions. Sequentially, gross margin declined 180 basis points, mainly driven by a decline in language services and an unfavorable revenue mix shift. Segment operating margin in the First Quarter was 34.5%, a decrease of 480 basis points from the prior year period, driven primarily by lower gross margin. Sequentially, the operating margin declined by 320 basis points on the lower gross margin and a higher corporate expense allocation. First quarter consolidated adjusted EBITDA was $64 million, down 34% year-over-year and 15% sequentially. Adjusted EBITDA margin for the quarter was 9.3%, down 260 basis points from the prior year period and 90 basis points sequentially, driven by the lower gross margin. First quarter net loss was $1 million. This compared with net income of $17 million in the prior year period and a net loss of $188 million in the prior quarter, which included a $222 million goodwill impairment charge. First quarter GAAP-diluted loss per share was $0.03. Adjusted earnings per share for the quarter was $0.45, compared with $0.97 in the prior year period and $0.75 in the prior quarter. Day sales outstanding for the quarter was 55 days, which was 9 days lower than a year ago and flat sequentially. Operating cash flow in the First Quarter was $93 million, and capital expenditures were $10 million. As of March 31, we had cash and equivalents of $56 million and debt of $1 billion, including $150 million on our revolver. During the quarter, we reduced our revolver balance by $60 million, and we will continue to use free cash flow to reduce the balance. We ended the quarter with a net leverage ratio of 3.1 times to 1. Moving to second quarter guidance, we project consolidated revenue to be in a range of $645-$660 million, down 11%-13% from the prior year period. This guidance includes an assumption of $16 million of labor disruption revenue. Gross margin is projected to be between 28.5%-29%. Reported SG&A expenses are projected to be 23.2%-23.7% of revenue. Operating margin is expected to be minus 0.7% to 0%, and adjusted EBITDA margin is expected to be 7.8%-8.3%. Additional Second Quarter guidance details can be found in today's earnings release. Let's go back to Cary for some closing remarks. Thank you, Brian. This week is National Nurses Week, and May is National Nurses Month. The theme of Nurses Week this year is the power of nurses, and we are extremely grateful for the profound difference that nurses make in the health of all Americans. I encourage everyone to share our appreciation for nurses everywhere, including the thousands of nurses who are part of the AMN family. Our 2025 RN survey showed that 8 in 10 nurses want to see improvement at their workplace in three areas: patient-to-nurse ratio, flexible scheduling, and administrative burden. We at AMN are continually working on innovative and flexible talent solutions to support nurses' physical and mental well-being and improvement of work-life balance to combat burnout. Our business depends on the quality of people we bring to serve the steadily growing demands of providing healthcare. So far in 2025, we have been thrilled to welcome top talent from across the industry onto the AMN team. These superb professionals have joined us in client-facing and key leadership positions. Our dedication to quality and innovation is making AMN a prime destination for the best people in the business. In further demonstration of our dedication to the highest quality, AMN again has received certification from the Joint Commission on the Accreditation of Healthcare Organizations. AMN was the first healthcare staffing company to receive this certification, and we have continuously maintained it since 2005. Before we move to questions, I want to take a moment to acknowledge the recent passing of AYA Healthcare's founder and longtime CEO, Alan Braynin. On behalf of AMN Healthcare, we extend our deepest condolences to Alan's family, friends, and the entire AYA team during this difficult time. Alan dedicated himself to growing the healthcare staffing industry, and he leaves a lasting legacy. Operator, please open the call for questions. Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press star 1 1 on your phone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Please stand by while we compile the Q&A roster. Our first question is for Mark Marcon from Baird. Your line is open. Good afternoon, and thanks for taking my questions. Cary, that was a nice thing for you to say, obviously. I do not know the family or client, but obviously condolences, that is tragic and puts things in perspective. Can you talk a little bit about the VMS wins that you had and the MSP wins that you had? It sounds like you have got five. How big are they? Are they new to using an MSP or VMS, or were they competitive wins? Any sort of color there would be appreciated. Yeah. A couple of things. One is, I think, as you think about just the wins overall, they're reflective of a very intentional strategy we've had to accelerate our go-to-market, particularly to broaden our positioning across the entirety of the market where we had been MSP-centric for some period of time. Mark, a lot of the wins that we are seeing now are manifestations of strategies we put into place over a year ago, just given some of the lead time. For those wins, I'd characterize them as small to medium wins, but the names underneath them carry even more weight in a couple of cases than what their spend under management would indicate, and they were competitive wins. A broader comment that I'll say about what we're seeing is healthy pipeline growth in our sales pipeline from Q4 to Q1. We had been seeing for, I'd say, probably two years coming out of the pandemic, a bias in the pipeline toward vendor neutral. We are just starting to see some swing back. We are still seeing strong interest in vendor neutral, but we are seeing some swing back and growth in our pipeline in MSP. That's great. Do you have a size in terms? You said they were small to medium, but when we consolidate them all, what sort of revenue contribution could they ultimately end up generating once they? If you look at year to date, we're in a net client win position. Think of it as that would help us from a net revenue standpoint as we go later into the year. Okay. Great. Can you talk a little bit more about language services and some of the dynamics there? Historically, it's been a growing space with really healthy margins, and just wondering about what you're seeing from a competitive perspective and how you would expect that to unfold over the quarter and the year ahead. Yeah. In language services overall, we continue to see healthy growth. You will see that in the second quarter, and we expect that to continue as we go through the year. From a competitive standpoint, we have seen, particularly over the past 12-plus months, some consolidation in the space. You have seen that consolidation, particularly among kind of two or three players, happen over 2024 and a bit in 2023. That is putting a bit of pressure on margins. We still see this business as a high-growth, high-margin business, and it is very attractive. We are very well-positioned with our solution set of video and audio. We can offer both a high-quality solution, but given the efficiency of how we deliver our services, it also is a cost-effective solution for clients. We think we are very well-positioned even in a competitive environment. Would you expect the gross margins on that part of the business to basically stabilize at these levels, or how are you thinking about that? Yeah. Hey, Mark. This is Brian. I think that's a fair characterization. We've seen a little bit of a decline as we called out, but we also are working internally on always improving the quality of the service, but also how we think about utilization of interpreters and the mix between permanent and use of contract onshore and offshore as well. We are already making some adjustments that will bring down some of our costs with it, in no way impacting the quality of our service, which we know is a differentiator. At this point, we feel like we've got some good actions that are going to help stabilize, even if there's a little more pressure on the price side with some of the competitors. We are feeling good that this is a good stable point. Hey, Mark. One thing I'll note, just picking up on one of Brian's comments, is it is a differentiator, both kind of our video capabilities, but also our onshore/offshore. For some clients, having the ability to have onshore interpreters is very important to them. Not every competitor offers that option. That is also a differentiation that is important to a number of clients and/or prospects that we talk to. Great. Can I squeeze one more in? Just on travel nurse bill rates, it sounds like they were only down a little bit year over year. Do you feel like that's basing out? I know that there's still some orders out there that aren't competitive, but do you feel like we're starting to see some real basing and a point where we can start building again? Yeah. If you look at the bill rates, we've really seen stabilization from the back half of 2024. Even though we're down 6% year over year, you saw stabilization that we talked about in the past quarter as well. Currently, we are at a premium spread of contingent cost to permanent labor of about 11%. Pre-pandemic, you would have seen that range more in the mid to high teens. I think, as we have talked about over the past couple of quarters, as we've seen some of the stabilization in bill rates, you're continuing to see signs that you have seen some stabilization. Unfilled orders are relatively where they were last quarter, maybe a slight uptick. I think from here on in, really, if there's an immediacy of the need of some of these clinicians, you would expect for some of those bill rates to go up to ensure that they are able to fill that need. That's great. Thank you very much. Thanks, Mark. Thank you. Our next question is from Trevor Romeo with William Blair. Your line is open. Hey, good afternoon, everyone. Thanks so much for taking the questions. I want to thank you also for providing the slide deck this quarter. That's extremely helpful for us, so appreciate that. Maybe I'll just pick up on the unfillable order topic. I had a question on that. I mean, it definitely appears that order volumes are ticking up across the industry still. I think Cary talked about continuing to see orders priced at levels no one's filling, but the gross margins seem a bit more stable this quarter. Two questions on that. One is, are you starting to see competitors taking less of those low-margin orders? Then two, what do you think it'll take for clients to move those bill rates higher so that they can be filled? Yeah. On the first one, I think the unfilled orders is probably reflective of rationality of competitors of not filling orders that do not make economic sense. What we have seen in terms of those unfilled orders getting filled is it typically is a client going back, and there is a more immediate need of getting that filled and increasing the bill rate to a price that will be reflective of current market conditions, whether that is geographic or by specialty. A part of the challenge that you have had, particularly over the past three or four quarters, is that while you got into in 2024, we really started to see the bill rate stabilize, but the underlying labor market, you are still seeing increases in wages. There is a market-matching condition that you have to have around the bill rate to reflect where clinicians are willing to go to take the assignment. It is pretty client-specific. As we see more of those needs become more immediate, we would expect some of those bill rates to change. Yeah. In terms of competitive behavior, it's been pretty much the same, right? We're seeing that unfilled percentage, like I said, maybe the same or maybe ticking up a bit, which is, I think, an indication that clients with low rates have kind of tested the bottom and maybe gone too far. I think competitors may be filling some orders, but they're not filling these ones that have rates that just don't make economic sense. That really hasn't changed. I think as we go through this year, if there's a greater need or competitors just realize it's not going to change, you'll probably see some of them move away from the industry, which would be healthy longer term. Ideally, clients, if they have pushed it for a while and realize that that rate is not going to actually attract clinicians in, they'll start to move. It's on a client-by-client basis. We're definitely seeing that happen. We just need to see it more broadly across the industry. Trevor, one other add I would have to Brian's comments is when you look at some of the things that have improved for the healthcare system, you've seen a return to pre-pandemic retention rates. You saw a reestablishment of their permanent base through accelerated hiring. Those two things were significant improvements in terms of the stability of their workforce. You now have, from a completion strategy, very cost-effective contingent labor cost. I do think, as you look forward, how systems think about the completion of that strategy, it probably will look different than it maybe did 18 months ago when that premium spread was at much higher levels. Got it. That makes a lot of sense. Thank you both. For my follow-up, I wanted to ask on the labor disruption piece. I mean, it seems like it's come in ahead of your expectations the last couple of quarters. Cary, you talked about the pipeline. I think some of the recent capabilities have improved in that area. I guess, would you say that the underlying amount of labor disruption is growing, or is it more about that internal kind of focus and execution? Either way, is this an area where you could see kind of a more consistent revenue cadence going forward? Thanks. Yeah. It's more the internal focus and how we operate. As we went back and looked at the total CBAs in the market last year versus this year, last year was higher. Our pipeline and the clients and the events we're supporting are higher because we've been focused on it. I'd say it's been on really two very important fronts. One is it is very clear to us that for clients who have this need, it is a very important need. Our focus is on how we support our clients. The second part really speaks to some of the commentary that I had in the beginning, which is we now have technology. We have more automation in our business. We have an ability to support important parts of our process 24/7, around the clock globally. There are a number of things that we have worked on over the past 12 to 18 months that have positioned us to be able to support our clients very effectively here while also not affecting the high service quality in our core businesses. We wanted to have confidence that we could do that and make sure that we were not affecting the quality of service that we had in our core. From a modeling standpoint, it's a great question. We still model $5 million of revenue a quarter. It's just not as predictable. We do have a stronger pipeline. We have more upside than we have had, especially more recently in some of these events. It can still be lumpy because even when there's an expiring bargaining agreement, that doesn't necessarily mean that the next day they go on strike. There may be an agreement in place. We're planning for it, but the timing is somewhat unknown and the duration. We do believe that we will continue to have the service, and there will be strikes that will happen. In terms of the magnitude and the exact timing, it's still very difficult to predict. The good thing is, as Cary pointed out, we have a team that can support that really well. We now have industry-leading technology behind it. We feel like we're really well-positioned to be able to win those opportunities that come up and provide really critical service. It is still hard to predict the exact timing and magnitude. Yeah. If I could maybe just sneak in one quick follow-up on that, Brian, on the incremental margins on that business, can you just maybe remind us what you typically see there relative to your other businesses in that segment? Yeah. It's a fair question. Again, there's lots of variables in that because, again, sometimes if there's work leading up to an event and it doesn't happen, you might get more fees on kind of preparing, and that could be a higher margin. We found over the last couple of years for events that occur, as we've mentioned in the last couple of quarters where we've had a pretty sizable amount of revenue, the gross margins are not materially different than the segment margin. We obviously get more flow-through, though. The G&A side of it, we definitely have incremental cost. That team is already in place, but travel costs and other logistics support that occurs. We get a nicer flow-through on the EBITDA margin, but the gross margin impact for Nurse and Allied is pretty consistent with what you're seeing in our core business. All right. Thank you very much. I appreciate it. Thank you. Our next question is from A.J. Rice with UBS. Your line is open. Hi, everybody. Maybe a couple. I hear some of what you clarification of previous comments. Just to make sure I understand, in the Nurse and Allied bill, especially the nursing, the bill rates are stabilizing. You've said that the last two quarters, but you've also had an uptick in labor disruption revenues. Is on an apples-to-apples basis, putting the labor disruption aside, are you seeing stabilization, or is that having any influence on sort of helping stabilize the rates? Yeah. Hey, A.J. Thanks for the question. Just to be clear, the labor disruption revenue, those rates are not included in the bill rates that you see us talk about here, and that's stability there. We're really talking about the bill rates for our kind of core travel nurse and travel allied businesses. That's where we've seen stability for the last several quarters. The rates on labor disruption vary quite a bit. They can be higher just because you're trying to pull in for short duration, but that's not influencing the metrics we're talking about here. Okay. That's helpful. Going back to the language services, I understand the comments about the competitive landscape, but you also mentioned in the prepared remarks a little bit of weakening in demand for Spanish translation services and maybe potentially impacted by some of the dynamics out of Washington. It begs the question about how much of an impact is that. How big is Spanish translation services in your business? I guess to think about it from what's going on with immigration and all, do you have a lot of that in the emergency room, or is that more people that are actually admitted to the hospital, etc.? We haven't. Language is the number one language for interpretation, and that's not a surprise. What we have seen so far is a modest downturn in Spanish as a percentage of our total language mix. It is something that we're monitoring because we have typically seen that as very strong growth. It's not something that is, at this point, that we would see impacting. We're actually seeing growth into second quarter, and we would expect that to continue throughout the year. It is something that we're monitoring. We haven't seen any slowdown in interest or demand from clients. The only place where we have seen any type of impact is a modest downtick in the percentage of Spanish as total minutes offered. Okay. And then just one last one. I think in the prepared remarks, you mentioned that you had a little pressure in bill pay spread and locum tenens. I know you can have volatility based on the specialists that are in demand at any given time, but I do not think I have heard you say that there was some pressure on the bill pay spread before. Maybe I am wrong on that, but what are you seeing there? Yeah. I mean, I think we've probably called it out at times. I mean, there's competition there. There's been some pressure on just the spreads overall as we're really trying to drive days filled. There has been a component of mix with our CRNA business, which has been a nice strong growth in days, but it does carry a lower margin impacting the spreads overall for that business. I think we've—and so you see more of an impact on a year-over-year basis. It's much smaller sequentially. As we look into the second quarter and the remainder of the year, I feel like we're in a good place and spreads are starting to stabilize. I think the other important point I think we mentioned in the last call is that we're seeing good momentum in some of our other specialties now. A lot of we've built up the teams there in some of the internal medicine, psych, surgery, these other areas that have a better rate and margin profile. I think the team is very confident that we're going to be able to grow those specialties, which should have a positive influence on our margins longer term. Okay. Thanks a lot. Thank you. Our next question comes from Brian Tranquilut from Jefferies. Your line is open. Hi. This is Meghan Holtz for Jack Sleven. Thank you for taking the question. Just a little bit deeper and beyond the Spanish commentary, are you guys seeing any apprehension from clients in taking on full-time hires given the background right now on the macro side and the policy uncertainty, or is it too soon to tell? Yeah. I think generally it's too early to tell. Clients are monitoring the fluid environment around healthcare policy and doing scenario planning. What we have seen and what a lot of the commentary, particularly over the past two weeks from some of the healthcare systems, is that they are still seeing a healthy increase in patient demand. For us, we had a strong start to the year. We are very focused on how we continue to increase our demand and fill more of the demand that's out there in the market. The only thing that we have seen from a behavioral standpoint over the past couple of weeks is we've seen some slowdown in client decision-making. We've seen this off and on over the past two years. That is not something that is new to us. We do think that, particularly with my earlier comments about where you see some of the premium spread to permanent positions, right now in this environment, contingent is actually a very attractive alternative if there is not—if while they wait and look at where some of these policies land. Okay. Thank you. And then just a follow-up. Can you guys walk through any updated thoughts on the progression of the international business throughout the balance of the year? Sure. Yeah. As we talked about in the last call, I'd say there's no major changes there. We did expect to see—and we have seen—a decline sequentially from Q4 to Q1, call it the $3 million-$4 million range. We'll see a similar amount in the Second Quarter. That's really just a function of, with retrogression, that we've got more nurses coming off their contract than we're able to place. That is stabilizing. We still expect by the time we get to the Third Quarter. Q3 and Q4 should look a lot like the Second Quarter. No longer a headwind after the Second Quarter from everything we're seeing right now. We still expect to see that start to turn positive in 2026 as you continue to see the visa dates move forward. Other than that, again, clients want to bring in more international nurses. It's just a function of getting that visa date moved forward so that we can pull more that are in the pipeline into the U.S. and into these assignments. Yeah. What we've seen, just to add on to Brian's comment about support, is the need for international clinicians is supported both in a bipartisan kind of environment, and it's also pretty universally supported by health systems. It fills a very important need for a number of systems, I'd say, particularly those that are non-urban settings that have a harder time being able to retain and attract talent. Got it. Thank you for the caller. Thank you. Our next question comes from Jeff Silber with BMO Capital Markets. Your line is open. Hey. Thank you. This is Ryan for Jeff. Just wanted to refresh on the capital allocation priorities at this point in time. Is taking leverage ratio down first and foremost, and then just any thoughts on repurchases or M&A? Thanks. Sure. Brian, as I mentioned in our prepared remarks, definitely our priority right now is to continue to use free cash flow to pay down debt. That is not going to change this year. From a capital deployment on CapEx, we've said that we'll expect to spend somewhere between $40 million and $50 million this year. That is a little more than half of what we spent in 2024. We did adjust our capital expenditures so that we could deploy more towards debt reduction. I think it's still creating a point of differentiation for AMN in that we're still investing in innovation, in AI, things that are going to continue to improve our service delivery speed and fulfillment. I think that's where maybe some of our other competitors that are having to pull back even more on their CapEx, we're excited about what we're bringing forward here. You hear us talk about it in the investments we're making across the business. We think those are really important to our long-term strategy. It's a good balance between deploying for those important investments, but also paying down our debt and keeping that leverage within our covenants. Got it. Thank you. Just to follow up on one of the prior questions, I was curious how things trended throughout the quarter and exited the quarter. I was wondering if you noticed any incremental hesitancy from clients, either post-DOGE or tariff announcements or anything to call out there. Thank you. No. We continue to see strong demand. If you kind of look at our businesses, we continue to see strong demand in allied, locum, strike, school bookings, language services. In nurse, we are still year-to-date through April versus the year-over-year comparison. We're up mid-teens. In that, we did see a bit of pullback in April. Even with that, we're still up 15% year-over-year. We continue to see healthy demand in the businesses. The one thing that, as I mentioned earlier, that we have seen is some slowdown in decision-making. Once a candidate is presented, the decision-making around that or around an extension. Thank you for your question. Our next question comes from Joanna Gajuk from Bank of America Security. Your line is open. Hi. Thanks so much for taking the question. Maybe a couple of questions on your guidance. I do not think I have heard some of the metrics that you normally discuss. What do you assume for the nurse and allied volumes in Q2 and also for the bill rates in Q2? The last piece is gross margin for nurse and allied in Q2. I guess you did 22.7%, I think, in Q1. That was better than what you had assumed. Maybe if you can give us some of these assumptions, that would be helpful. Thank you. Yeah. I don't think we're going to give that specific level of detail. We did mention in the prepared remark that there is, we expect to see kind of normal seasonality in nursing, which if you go back, it's not uncommon to see our volume come down some from Q1 to Q2 as some of those winter assignments end. We're expecting to see that sequentially. Like I said, in a kind of a normalized pattern, low single digits. Allied, again, underneath allied, again, good demand in our core allied business. Schools, you typically do see a decline from first to second quarter, again, as you're moving into the summer months. I'd say in that regard, it's pretty similar. On the rate side, again, the stable rate, bill rate going from Q1 to Q2, the only influence, again, some of those winter assignment orders might have had a little bit higher rate attached to them. Underneath that, we've seen stability in rates as well. I guess on the gross margin overall in Q1, you mentioned that—oh, I did not mention it, but we can see that it was better than your guidance. What actually drove the outperformance there? I guess then for your Q2 guidance, right, on the overall gross margin, you kind of assumed kind of stable, maybe actually up at the midpoint a little bit, 10 basis points or so. Can you walk us through the outperformance in Q1? I guess why you are thinking the gross margins could actually be up sequentially? Thank you. Sure. I mean, there were not any major drivers of that outperformance in Q1. We had a workers' comp actuarial benefit, a favorable adjustment of about $1.5 million that has about 20 basis points. We did have a little bit better performance in our VMS revenue, which is a high-margin search as well. It was kind of a sum of several small things that ended up driving outperformance in the gross margin in the First Quarter. The guide we have given for Q2 would imply down a little bit, part of that being driven by that one-time workers' comp adjustment in the First Quarter, not happening again in the Second Quarter. The rest of it is really predominantly just mix. We are seeing pretty stable margins. Nothing I would call out as highly notable from Q1 to Q2. Thank you. Thank you. Our next question is from Tobey Sommer from Truist. Your line is open. Good afternoon. This is Tyler Barishaw for Tobey. You mentioned in the prepared remarks some changes to your gross margins with some process changes with technology. Could you just go into a little more detail on what some of those are? Yeah. Part of what we have been doing is we just rolled out, after development in the back half of the year, a gross margin tool. Part of what we have been focused on in our technology investments is how do we create both automation but efficiency? That has been very well received. It will create about a 4% on average productivity improvement for our recruiters. Those tools are really helpful in us both attracting but also retaining the top recruiting talent. The other pieces that you have seen us focus on in our technology that helps our ability to generate revenue are our AI matching. We put in the Fourth Quarter in our locum business, we put AI matching capabilities with candidates that help recruiters with their speed. If we look year-over-year in our locum fill, it has gone up considerably. Some of that tech enablement is a part of it. There is continued—I mean, it is daily, weekly. We are rolling out new enhancements in the tools that we are providing to our recruiters. Some of it we cannot share necessarily from a competitive point of view, but just know that we are getting really good internal reaction to some of the investments we are making. Continuing to build out AMN Passport for the clinicians as well to make it easier for them to onboard, search for jobs, credentials, and really create a more cohesive integrated platform between ShiftWise Flex, our internal applicant tracking system, Passport. Everything is very well connected and things flow more seamlessly, which in all cases improves speed and the experience both for clients, clinicians, and our internal teams. Got it. Can you just discuss some competition in the marketplace? Has competition eased at all in the last couple of months, especially with a peer being acquired potentially? Yeah. The competition is still very intense. The acquisition, the AYA Healthcare Cross Country Healthcare acquisition is not complete yet. They are still competitors. We expect that competitive environment to stay intense. There is more competition for the demand that's out there. You start to see a rationalization and consolidation already over the past year. We think that more has to happen over the coming years. We would expect both for it to continue to be a competitive environment and for there to be continued rationalization of the capacity that's in the market. Really kind of furthering some of Brian's earlier comments, if we look at our capabilities, which includes our platforms, our broad solutions, our extraordinary team, we think that we are well-positioned in that very competitive environment. We are seeing that increasingly with our client wins, with our improved fill rates, with our ability to win against the entirety of the market from MSPs, vendor neutral, and direct. Thank you. Thank you. I'm showing no other questions at this time. So I would now like to turn it back to Cary Grace for closing remarks. Thank you all for your interest in AMN and for tuning into our conference call. I want to do a shout-out both to our AMN team members who got us off to a strong start to 2025, as well as to say a special note of gratitude to every nurse out there as we celebrate you through the entirety of this month. Thank you. This does conclude the program. You may now disconnect. Have a good day.