Cross Country Healthcare Inc.

Company Overview

Business Model: Cross Country Healthcare, Inc. is a healthcare workforce solutions company that provides total talent management services, including strategic workforce solutions, contingent staffing, permanent placement, and consultative services. The Company places highly qualified healthcare professionals across virtually every specialty and area of expertise, as well as non-clinical professionals such as teachers and substitute teachers. Its core value proposition involves optimizing and sustaining health systems' entire labor ecosystems through an AI-powered digital platform, Intellify®, and nearly 40 years of healthcare labor expertise. Revenue is primarily generated from staffing registered nurses and allied professionals on travel contract assignments (typically 13 weeks), local per diem, short-term assignments, and permanent positions.

Market Position: Cross Country Healthcare, Inc. operates on a national, regional, and local basis in a highly competitive U.S. temporary healthcare staffing and workforce solutions market. Staffing Industry Analysts' September 2025 report estimated the 2025 healthcare staffing market size at $39.4 billion. The Company held a 3.0% market share in 2024, ranking as one of the largest firms in travel nurse staffing, per diem nurse staffing, allied healthcare staffing, and locum tenens. Key competitive advantages include its national footprint, diverse portfolio of assignments, proprietary technology platform Intellify®, and a consultative approach to total talent management.

Recent Strategic Developments:

• Digital Transformation & AI Investment: The Company is undergoing digital transformation, investing in AI and automation technologies to enhance customer-facing and candidate engagement systems. Initiatives include innovative search and match capabilities, and expanding Intellify® to support the Education business.
• CEO Transition: Effective December 15, 2025, Kevin C. Clark, the Company’s current Chairman of the Board, former CEO, and co-founder, was appointed President and CEO, succeeding John A. Martins.
• Aya Merger Agreement Termination: On December 3, 2025, the Agreement and Plan of Merger with Aya Holdings II Inc. was terminated. Cross Country Healthcare, Inc. received a $20.0 million termination fee.
• Rebranding Initiative: As part of its go-to-market strategy, the Company rebranded Medical Staffing Network to Cross Country Local in the fourth quarter of 2025.

Geographic Footprint: Cross Country Healthcare, Inc. generates all its revenue in the U.S. and provides staffing services and workforce solutions in all 50 states. In 2025, the largest percentage of its revenue was concentrated in California, Florida, and New York. The Company maintains significant back-office operations in Pune, India, through its Cross Country Infotech, Pvt. Ltd. subsidiary, which provides information systems development and support, finance, accounting, and administrative processing functions.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: 20.3% (2025) vs. 20.4% (2024)
• Operating Margin: -8.0% (2025) vs. -1.3% (2024)
• Net Margin: -9.0% (2025) vs. -1.1% (2024)

Investment in Growth:

• R&D Expenditure: Not explicitly stated as a separate line item, but the Company continued to invest in technologies for internal and external systems, focusing on AI and automation.
• Capital Expenditures: $8.2 million (primarily for IT projects)
• Strategic Investments: Investments in expanding technology capabilities, including AI and automation, recruitment and candidate nurturing tools, market analytics, mobile applications, self-serve capabilities, programmatic advertising, and social media.

Business Segment Analysis

Nurse and Allied Staffing

Financial Performance:

• Revenue: $862.8 million (-24.7% YoY)
• Contribution Income: $57.9 million (-20.2% YoY)
• Operating Margin: 6.7% (2025) vs. 6.3% (2024)
• Key Growth Drivers: Home-based staffing revenue grew 28.0% YoY, partially offsetting declines in travel and local staffing.
• Operational Metrics: Average FTEs on contract decreased by 17.3% to 6,784. Average revenue per FTE per day decreased by 8.5% to $346.

Product Portfolio:

• Traditional staffing, recruiting, and total talent solutions (temporary and permanent placement of travel and local nurse and allied professionals, and healthcare leaders).
• Vendor neutral programs and managed service programs (MSPs).
• Education healthcare services.
• Caregiver services to Programs of All-Inclusive Care for the Elderly (PACE) programs (home-based staffing).
• Outsourcing services, including Recruitment Process Outsourcing (RPO).
• Software as a Service (SaaS)-based, proprietary, vendor management technology, Intellify®.

Market Dynamics:

• The segment experienced volume declines in travel and local staffing, reflecting broader market trends.
• The Company serves a diverse customer base including acute and non-acute care hospitals, government facilities, schools, academic medical centers, and PACE programs.

Physician Staffing

Financial Performance:

• Revenue: $191.5 million (-3.6% YoY)
• Contribution Income: $16.2 million (+5.8% YoY)
• Operating Margin: 8.5% (2025) vs. 7.7% (2024)
• Key Growth Drivers: A slight increase in revenue per day filled, partially offsetting volume declines in certain specialties.
• Operational Metrics: Total days filled decreased by 14.0% to 84,213. Revenue per day filled increased to $2,274 (from $2,029 in 2024).

Product Portfolio:

• Placement of licensed practitioners across a broad array of specialties, as well as certified registered nurse anesthetists (CRNAs), nurse practitioners (NPs), and physician assistants (PAs) on temporary assignments.
• Offers Intellify® vendor management technology to facilities.

Market Dynamics:

• The segment serves healthcare facilities, medical group practices, government facilities, and managed care organizations.
• Demand is influenced by persistent physician shortages, with the locum tenens segment forecasted for moderate continued expansion.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: $6.5 million (803,175 shares) repurchased and retired in 2025.
• Dividend Payments: Cross Country Healthcare, Inc. has never paid or declared cash dividends on its common stock.
• Future Capital Return Commitments: $34.0 million remained available for share repurchases under the Repurchase Program as of December 31, 2025.

Balance Sheet Position:

• Cash and Equivalents: $108.7 million (as of December 31, 2025)
• Total Debt: $0 (no borrowings drawn under the Asset-Based Loan Agreement as of December 31, 2025)
• Net Cash Position: $108.7 million
• Debt Maturity Profile: The Asset-Based Loan Agreement was extended through March 21, 2027.

Cash Flow Generation:

• Operating Cash Flow: $48.3 million (2025)
• Free Cash Flow: Approximately $40.1 million (Operating Cash Flow minus Capital Expenditures)
• Cash Conversion Metrics: Days' sales outstanding, net of amounts owed to subcontractors, was 58 days as of December 31, 2025, up 3 days year-over-year.

Operational Excellence

Production & Service Model: Cross Country Healthcare, Inc. operates through a relatively centralized model, servicing assignment needs for healthcare professionals, physicians, and customer facilities. Support activities such as housing coordination, payroll processing, benefits administration, billing and collections, travel reimbursement, customer service, and risk management are performed by a predominantly remote work team, supplemented by a few corporate offices.

Supply Chain Architecture: The Company relies on third-party vendors for certain critical functions, including background screenings of employees and timekeeping systems for payroll processing.

Facility Network:

• Headquarters: Boca Raton, Florida (approximately 26,000 square feet, lease through December 2026). Houses corporate executive staff, legal, finance, risk management, internal audit, information technology, Nurse and Allied executive staff and operations, human resources, payroll and billing, sales, and marketing.
• International Operations: Pune, India (approximately 38,000 square feet, lease through April 2029). Houses software development, information technology support, sourcing, finance, and shared support services.

Operational Metrics:

• Average FTEs (Nurse and Allied Staffing): 6,784 (2025)
• Average revenue per FTE per day (Nurse and Allied Staffing): $346 (2025)
• Days filled (Physician Staffing): 84,213 (2025)
• Revenue per day filled (Physician Staffing): $2,274 (2025)

Market Access & Customer Relationships

Go-to-Market Strategy: The Company employs an enterprise sales approach, marketing its full capabilities across the continuum of care to hospitals, healthcare facilities, schools, PACE programs, and other organizations across the U.S. This strategy addresses total talent management needs by customizing diversified offerings.

Distribution Channels:

• Direct Sales: National and in-market staffing teams place healthcare professionals on various assignments.
• Channel Partners: Utilizes other staffing agencies through Managed Service Programs (MSPs) and Vendor Neutral Programs (VMS) via its Intellify® platform.
• Digital Platforms: Leverages Cross Country Marketplace (proprietary mobile on-demand staffing platform) and Xperience™ (self-service candidate portal) for candidate engagement and real-time matching.

Customer Portfolio: Cross Country Healthcare, Inc. serves a diverse customer base, including public and private acute care and non-acute care hospitals, outpatient clinics, ambulatory care facilities, single and multi-specialty physician practices, rehabilitation facilities, PACE programs, urgent care centers, local and national healthcare systems, managed care providers, public and charter schools, correctional facilities, government facilities, pharmacies, and retailers.

• Customer Concentration: No single customer accounted for more than 10% of the Company's revenue for the years ended December 31, 2025, 2024, and 2023.

Geographic Revenue Distribution: All revenue is generated in the U.S. In 2025, the largest percentage of revenue was concentrated in California, Florida, and New York.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The U.S. temporary healthcare staffing and workforce solutions markets are highly competitive and evolving, with increasing demand for speed and reliance on technology. The 2025 healthcare staffing market was estimated at $39.4 billion. Forecasts indicate moderate continued expansion in the locum tenens segment, moderate declines in allied healthcare and per diem nursing in 2025 (followed by modest expansion in 2026), and a third consecutive year of contraction for travel nursing before slight growth in 2026. Persistent physician shortages (projected up to 86,000 by 2036) and an aging U.S. population are primary drivers of increasing demand for healthcare services.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors: Aya Healthcare, Medical Solutions, AMN Healthcare Services, CHG Healthcare Services, Amergis, Jackson Healthcare, Ingenovis Health, Hallmark Healthcare Staffing, RightSourcing, American Healthcare Services Association, Favorite Staffing, GHR Healthcare, SimpliFi, and HealthTrust Workforce Solutions (HCA).

Emerging Competitive Threats: New entrants, disruptive technologies, and advancements in AI and machine learning that could automate or streamline functions historically provided by staffing firms, potentially reducing demand for third-party services.

Competitive Response Strategy: Cross Country Healthcare, Inc. is focused on digital transformation and innovation, investing in AI and automation, personalizing the candidate experience, delivering superior customer experience, and enhancing productivity. The Company aims to grow stockholder value by deepening relationships with existing customers and healthcare professionals, expanding its customer and candidate base, improving operating leverage, and modernizing technologies and processes.

Risk Assessment Framework

Strategic & Market Risks

• Market Dynamics: Operations and financial results may be affected by pandemics, epidemics, or other public health crises, leading to reduced demand or supply shortages. Global economic conditions, including inflation and recession, could decrease demand or pricing for services.
• Technology Disruption: Inability to anticipate and quickly respond to changing marketplace conditions, such as alternative modes of healthcare delivery (retail medicine, telemedicine, home health) and advancements in AI, could adversely affect competitive position. AI could automate staffing functions or enable clients to enhance internal capabilities, reducing reliance on third-party firms.
• Customer Concentration: While no single customer accounts for more than 10% of revenue, arrangements are generally terminable upon 30 to 90 days' notice, posing a risk of customer loss, especially with increased Request for Proposals (RFPs).
• Intermediary Organizations: Increased use of intermediary organizations and side-by-side managed service providers by customers could impact profitability and contract acquisition, as these intermediaries charge administrative fees.

Operational & Execution Risks

• Information Systems & Technology: Dependence on proper functioning of information systems and third-party hosted applications, including risks associated with a new enterprise-wide ERP system implementation (delays, defects, integration issues).
• Cybersecurity: Vulnerability of company and third-party systems to damage, unauthorized access, and disruption from cyberattacks, potentially leading to operational, financial, and reputational damage, including exposure of personal and confidential information.
• Data Privacy: Changes in data privacy and protection laws and regulations, and failure to comply, could increase costs or adversely impact operations and reputation.
• AI Use: Social, ethical, and security issues related to AI use, including unauthorized use by employees, may result in reputational harm and liability.
• Talent Acquisition & Retention: Inability to recruit and retain enough quality professionals (nurses, allied, physicians) due to intense competition, potentially limiting business growth.
• Labor Costs: Shortage of experienced healthcare professionals and potential labor union activity could adversely affect labor costs, which may not be offset by increased bill rates.
• Third-Party Dependency: Reliance on external providers for critical functions (e.g., background screenings, timekeeping systems) poses risks of disruption and increased costs if providers fail to perform.
• International Operations: Significant back-office operations in India expose the Company to risks such as currency fluctuations, changes in foreign regulations, political/economic instability, and infrastructure limitations.

Financial & Regulatory Risks

• Healthcare Industry Regulation: Highly regulated industry; changes in federal/state healthcare laws, reimbursement policies, or industry consolidation could reduce funds available for services or require modifications to offerings.
• Regulatory Compliance: Modifications, inaccurate interpretations, or violations of statutory/regulatory requirements (licensure, wage and hour, employment taxes, data privacy) may result in material costs, penalties, or litigation. Specifically, the Company faces ongoing challenges regarding home-based staffing licensure in California.
• Litigation & Claims: Exposure to various litigation, claims, investigations (employee-related, professional liability, tax, payroll, class actions), which could result in substantial judgments, settlement costs, or uninsured liabilities.
• Tax Risks: Disagreements with taxing authorities on tax positions, future legislative tax changes, or inability to utilize net operating losses (NOLs) could result in adverse tax consequences.
• Independent Contractor Reclassification: Risk of federal or state taxing authorities reclassifying locum tenens physicians and other independent contractors as employees, materially impacting profitability and business model.
• Indebtedness: While currently having no borrowings on its ABL, a future increase in indebtedness could increase demands on cash resources, restrict financial flexibility due to covenants, and limit access to additional financing.

Geopolitical & External Risks

• Natural Disasters: Losses caused by natural disasters (hurricanes, fires, earthquakes) or other unexpected events, particularly given concentrations in South Florida and California, could cause material financial losses and business interruptions.

Innovation & Technology Leadership

Research & Development Focus: Cross Country Healthcare, Inc. is committed to digital transformation and innovation. Its R&D efforts focus on expanding technology capabilities for both customer-facing and candidate engagement fronts.

• Core Technology Areas: Utilizing Artificial Intelligence (AI) and other automation technologies to enhance internal and external systems. This includes innovative search and match capabilities, agentic agents to streamline workflow, and AI automation platforms to improve productivity and efficiency.
• Innovation Pipeline: Investments in recruitment and candidate nurturing tools, market analytics, mobile applications, self-serve capabilities (Cross Country Marketplace, Xperience™), programmatic advertising, and social media. The Intellify® platform is continuously enhanced, including new capabilities to support the Education business.

Intellectual Property Portfolio: The Company utilizes sophisticated proprietary applications, such as Intellify®, which are hosted in Tier 1 hosting facilities.

Technology Partnerships: Not explicitly mentioned in the provided text.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: The Company experienced a CEO transition in December 2025, with Kevin C. Clark appointed President and CEO. The executive team has extensive experience in staffing, workforce solutions, technology services, and healthcare industries.

Board Composition: The Board of Directors regularly meets with management to discuss Corporate Social Responsibility (CSR)-related topics and has full responsibility for risk oversight. The Audit Committee oversees risk management relating to cybersecurity.

Human Capital Strategy

Workforce Composition:

• Total Employees: Approximately 1,106 corporate employees as of December 31, 2025.
• Field Employees: An average of 6,784 full-time equivalent field employees in Nurse and Allied Staffing during 2025.
• Skill Mix: The Company employs over 20 healthcare clinicians on its corporate staff, forming a Clinical Quality Council.

Talent Management:

• Acquisition & Retention: Relies on word-of-mouth referrals, social and digital media, and engaging websites. Xperience™ and Cross Country Marketplace platforms support candidate experience and real-time matching. Offers competitive compensation, benefits, and scheduling options.
• Employee Value Proposition: Comprehensive total rewards program including market-competitive pay, healthcare benefits, 401(k) plan, paid time off, family leave, discount programs, and tuition assistance.

Diversity & Development:

• Development Programs: Fosters a growth mindset, encourages internal progression, and offers an array of learning and coaching resources. Utilizes Dayforce for professional development, Career Pathing, and Cross Country University. Partnerships with Strayer University, Excelsior University, and Capella University for discounted degree programs.
• Culture & Engagement: Awarded Great Place to Work® certification for a fifth year and recognized in U.S. News & World Report’s 2024 Best Companies to Work For. Adheres to a Code of Ethics and a Human Rights and Labor Rights Policy.

Environmental & Social Impact

Environmental Commitments: Not explicitly detailed in the provided text.

Supply Chain Sustainability: The Company's Human Rights and Labor Rights Policy, guided by the International Labour Organization Declaration on Fundamental Principles, extends to its vendors and suppliers, holding them to ethical standards.

Social Impact Initiatives:

• Community Investment: Supports numerous charities, including the American Red Cross, Leukemia and Lymphoma Society, American Heart Association, Random Acts of Flowers, Alzheimer’s Association, American Rivers, and Mission 22. Corporate employees receive a paid volunteer day off and can donate to charities directly from their pay.
• Product Impact: Aims to accelerate employability and career growth for candidates through Xperience™ technology. Supports healthcare professionals with a 24/7 hotline, specialized teams, and education/training opportunities.
• Employee Communities: Fosters Employee Communities based on Cross Country Culture Pillars: Education & Empowerment, Community & Belonging, Health & Wellness, and Innovation & Technology.

Business Cyclicality & Seasonality

Demand Patterns: The number of healthcare professionals on assignment is subject to seasonal fluctuations, which can impact quarterly revenue and earnings. Hospital patient census and staffing needs may fluctuate, for example, during flu season. Demand for services is also impacted by economic downturns or high inflation, where permanent healthcare staff may work more hours, reducing demand for temporary services. The travel nurse segment is forecasted to contract in 2025 before slight growth in 2026, while locum tenens is expected to expand.

Planning & Forecasting: The Company continuously monitors changes in regulations and legislation for potential impacts on its business.

Regulatory Environment & Compliance

Regulatory Framework: The healthcare industry is highly regulated by federal and state authorities, covering aspects such as professional licensure, wage and hour laws, employment taxes, state licensing and reporting, privacy, and general operations. Compliance requires significant resources.

Industry-Specific Regulations: The Company's home-based staffing business, particularly its caregiver services to PACE programs, faces evolving regulatory interpretations. In California, the Company received a Notice of Violation of Law (NOVL) alleging that its operations require licensure, which was appealed and denied. A second appeal and application for licensure have been filed. An adverse outcome could impose material costs, operational disruption, or limit services in California.

Legal Proceedings: Cross Country Healthcare, Inc. is involved in various litigation, claims, investigations, and other proceedings in the ordinary course of business, primarily related to employee matters (individual and collective claims), professional liability, tax, and payroll practices. The Company recorded $2.7 million in legal fees and settlement charges in 2025.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: (13.6)% for 2025, compared to 11.2% for 2024. The 2025 rate was predominantly impacted by an additional valuation allowance on deferred tax assets.
• Geographic Tax Planning: Subject to income taxes in the U.S. and certain foreign jurisdictions.
• Tax Reform Impact: The Company is not aware of any provision in the CARES Act, ARPA, or the One, Big, Beautiful Bill Act (2025) that would have a material adverse impact on its financial performance.
• Net Operating Losses (NOLs): As of December 31, 2025, the Company had approximately $31.5 million of federal NOL carryforwards and $52.5 million of state NOL carryforwards. A valuation allowance of $29.7 million was recorded on deferred tax assets in 2025, primarily due to cumulative losses and a significant impairment charge.

Insurance & Risk Transfer

Risk Management Framework: The Company's risk management program is designed to ensure prompt notification of incidents, educational training for employees, loss analysis, and timely reporting procedures to reduce exposure. It continuously reviews facts and incidents related to professional liability and workers’ compensation claims to identify trends.

Insurance Coverage: Cross Country Healthcare, Inc. maintains general liability, workers’ compensation, fidelity, employment practices liability, fiduciary, directors and officers, cyber, property, and professional liability policies.

• Self-Insurance: The Company is partially self-insured for workers’ compensation, health insurance, and professional liability coverage for its healthcare providers.
• Letters of Credit: As of December 31, 2025, the Company had $18.2 million in standby letters of credit for workers' compensation and $0.1 million for professional liability policies.

Risk Transfer Mechanisms: The Company is often required to indemnify customers against certain risks, including liabilities attributable to subcontractors. However, it does not maintain insurance coverage for wage and hour claims or for liabilities of its subcontractors or their personnel.