Cross Country Healthcare Reports 22.6% Revenue Decline in Q1 2025

Cross Country Healthcare, Inc. reported a significant decline in financial performance for the first quarter of 2025, with total revenue from services falling 22.6% to $293.4 million, down from $379.2 million in the same period last year. The decrease was primarily attributed to reduced demand for travel nurse and allied staffing services, which saw both volume and average bill rates decline. In contrast, the Physician Staffing segment experienced an 8.8% increase in revenue, reaching $51.1 million, driven by higher rates and a favorable specialty mix. The company recorded a net loss of $490,000, compared to a net income of $2.7 million in the prior year.

Operating expenses also decreased, with total operating expenses dropping to $294.4 million from $376.3 million, reflecting a 22% reduction. Direct operating expenses, which include field employee compensation and related costs, decreased by 22.2% to $234.8 million. Selling, general, and administrative expenses also fell by 17% to $52.5 million, primarily due to proactive cost management. However, the company incurred $2.0 million in acquisition and integration-related costs associated with the pending merger with Aya Healthcare, which is expected to close in the second half of 2025.

In terms of operational metrics, the Nurse and Allied Staffing segment saw a decrease in full-time equivalent (FTE) personnel by 18.8%, reflecting a decline in demand for contingent labor. The average revenue per FTE per day also decreased by 9.3%. Conversely, the Homecare Staffing segment reported a 29.5% year-over-year revenue growth, indicating a shift in demand towards home-based care solutions. The company maintained cash and cash equivalents of $80.7 million as of March 31, 2025, with no borrowings drawn under its asset-based loan facility, which has a borrowing base availability of $148.4 million.

Looking ahead, Cross Country Healthcare anticipates that the Aya merger will enhance its market position and operational capabilities. The merger was approved by shareholders on February 28, 2025, and is currently under review by the U.S. Federal Trade Commission. The company expects to navigate the challenges posed by current market conditions, including inflationary pressures and reduced demand, while leveraging its strategic initiatives to improve profitability and operational efficiency. The management remains focused on optimizing its service offerings and expanding its market share in the healthcare staffing industry.