AMN Healthcare Services, Inc. (AMN): 5 FORCES Analysis [Nov-2025 Updated]

You're assessing AMN Healthcare Services, Inc. right now, and frankly, the competitive landscape is tightening considerably as the market normalizes post-surge. We're seeing the direct impact: $\text{Q2 2025}$ consolidated revenue fell $\text{11\%}$ year-over-year to $\text{\$658}$ million, which tells you the five forces are all pushing hard. The core issue is that highly valued suppliers-the clinicians-have more leverage because of the ongoing US nurse deficit, while your customers, like large hospital systems, are aggressively focused on slashing contract labor spend and even forming their own staffing collectives. With rivals competing fiercely and substitutes like in-house hiring gaining traction, it's clear that AMN's $\text{TTM}$ revenue of $\text{\$2.71}$ billion is being tested from all sides; let's dive into the specifics of where the power truly sits in this dynamic market.

AMN Healthcare Services, Inc. (AMN) - Porter's Five Forces: Bargaining power of suppliers

You're looking at AMN Healthcare Services, Inc. (AMN)'s biggest cost driver: the clinicians they place. Honestly, the bargaining power of these suppliers-the healthcare workers-is definitely high, driven by fundamental market imbalances.

The persistent US nurse shortage is the bedrock of this power. The data shows a dire outlook for supply meeting demand. For instance, the HRSA projected a national shortage of 63,720 full-time equivalent (FTE) Registered Nurses (RNs) by 2030. Other analyses suggest the shortage could be far worse, with estimates pointing to a deficit of over 1 million registered nurses by 2030. This structural deficit means AMN Healthcare Services, Inc. (AMN) must compete aggressively for talent.

The demand side is also accelerating the need for premium pay. The number of RNs needed in the US by 2030 is estimated to jump 28.4%. This scarcity translates directly into higher compensation for specialized roles, which AMN Healthcare Services, Inc. (AMN) must cover to secure placements. Consider Certified Registered Nurse Anesthetists (CRNAs); their average hourly rates as of November 2025 are reported to range from approximately $92.48 per hour to $117 per hour. One source cites a mean hourly wage of $102.98. These high rates for specialized talent are a core component of AMN Healthcare Services, Inc. (AMN)'s cost of goods sold.

Here's a quick look at the market pressure points affecting AMN Healthcare Services, Inc. (AMN) as of late 2025:

Clinicians strongly prefer the flexibility that travel and locum tenens roles offer, which further increases their leverage over staffing agencies like AMN Healthcare Services, Inc. (AMN). When a clinician can command a higher rate by simply moving to a different agency for the same assignment, their switching costs between agencies are effectively low. While the clinician faces administrative hassle, the ability to shop for a better stipend or hourly rate-sometimes getting $200 more in weekly stipends-is a powerful negotiating tool.

The low switching cost for the supplier (clinician) means AMN Healthcare Services, Inc. (AMN) must maintain competitive pay packages to retain them, or risk losing them to a competitor who offers a better deal for the exact same hospital contract. This dynamic is clear when you see that AMN Healthcare Services, Inc. (AMN)'s management noted that modest bill rate increases were expected in Q4 2025 for the first time in 3 years.

The core of AMN Healthcare Services, Inc. (AMN)'s business model is selling access to this scarce talent. Therefore, the bargaining power of the suppliers is high because:

• The national RN deficit is projected to persist through 2030.
• Specialized talent, like CRNAs, command high hourly rates, sometimes near $150 per hour for top earners.
• Clinicians can easily switch agencies for better pay on the same assignment.
• The company's largest cost component is the talent itself.

Finance: draft 13-week cash view by Friday.

AMN Healthcare Services, Inc. (AMN) - Porter's Five Forces: Bargaining power of customers

The bargaining power of customers for AMN Healthcare Services, Inc. remains significant, driven by their intense focus on cost containment in a market saturated with options. You see this pressure reflected directly in AMN Healthcare Services, Inc.'s recent financial performance.

For instance, the second quarter of 2025 consolidated revenue for AMN Healthcare Services, Inc. fell 11% year-over-year, landing at $658 million. This top-line contraction signals that customers-hospitals and health systems-are successfully pushing back on pricing or reducing overall volume, which is a direct exercise of their buying power.

The market structure itself empowers customers. While the exact figure of 8,470+ firms mentioned in the framework isn't directly confirmed in the latest data, we know the market is fragmented. In 2024, 89 of the largest healthcare staffing firms generated $36.0 billion in US revenue, representing 86% of the market. However, the total number of businesses in the US healthcare staffing market was cited as around 2,927. This sheer number of alternative suppliers gives hospital systems leverage in negotiations.

Hospital systems are actively seeking ways to bypass traditional agency markups. A key indicator of this is the intense pressure on labor costs; a survey showed 89% of respondents feel pressured to cut staffing costs. This is because relying on expensive contract labor, such as travel nurses, can inflate labor costs by 20-30% per shift compared to internal staff. To combat this, some large buyers are exploring self-sufficiency. Academic medical centers, which represent about 20% of AMN Healthcare Services, Inc.'s consolidated revenue year-to-date, have reportedly taken the strongest measures to reduce spending due to federal funding cuts.

Managed Services Programs (MSPs) do offer AMN Healthcare Services, Inc. some stickiness, as these centralized vendor management systems can streamline the procurement process. Still, the customer holds the ultimate purse strings. When clinicians opt for agency placements through these systems, the services are often sold back to the health system at a markup ranging from 20-50%. AMN Healthcare Services, Inc. is trying to build direct engagement to counteract this, evidenced by their AMN Passport app surpassing 300,000 users.

Here is a summary of the financial and market context influencing customer power:

The trend toward customers forming internal staffing collectives or taking services in-house is a direct response to the high cost of external labor, even if specific data on the scale of these collectives is not yet public. The pressure is clear, and AMN Healthcare Services, Inc. must continually demonstrate value beyond simple placement to maintain margins against these powerful buyers.

• Hospitals are seeking long-term strategies beyond contractors due to contractor fatigue.
• The reliance on expensive contract labor has decreased from its 2022 highs.
• Travel nurse staffing revenue for AMN Healthcare Services, Inc. was lower by 25% year-over-year in Q2 2025.
• Locum tenens revenue was flat year-over-year in Q2 2025.

AMN Healthcare Services, Inc. (AMN) - Porter's Five Forces: Competitive rivalry

The healthcare staffing market remains highly fragmented, with AMN Healthcare Services, Inc. competing against major rivals like Cross Country Healthcare, Inc. (CCRN). For instance, in the second quarter of 2025, AMN Healthcare Services, Inc. reported consolidated revenue of $658.2 million, while Cross Country Healthcare, Inc. posted consolidated revenue of $274.1 million for the same period. By the third quarter of 2025, AMN Healthcare Services, Inc.'s revenue settled at $634.5 million, and Cross Country Healthcare, Inc.'s revenue contracted to $250.1 million.

This intense competition is clearly driving down key operational metrics across the industry in 2025. AMN Healthcare Services, Inc.'s largest segment, Nurse and Allied Solutions, saw its Q2 2025 revenue drop 14% year-over-year to $382 million. Within that segment, Travel Nurse staffing revenue specifically declined 25% year-over-year in Q2 2025. Utilization, as measured by AMN Healthcare Services, Inc.'s Average Travelers on Assignment, was 8,700 in Q2 2025. Similarly, Cross Country Healthcare, Inc. saw its core Nurse and Allied Staffing segment revenue drop 24% year-over-year in Q3 2025, driven by a 17% decline in Full-Time Equivalents (FTEs).

AMN Healthcare Services, Inc. is actively differentiating its offering via technology platforms like the ShiftWise Flex platform and its Vendor Management System (VMS) offerings. However, the VMS segment itself reflects the market pressure; AMN Healthcare Services, Inc.'s VMS revenue was $19 million in Q2 2025, representing a 31% decrease year-over-year, falling further to $17 million in Q3 2025, down 32% year-over-year. Still, technology adoption shows potential for rate leverage elsewhere; one health system using a related WorkWise suite platform achieved a 19.5% reduction in average bill rates. Furthermore, AMN Healthcare Services, Inc. monetized some of its technology assets, receiving $65 million cash from the sale of Smart Square in Q3 2025.

The competitive environment forces rivals to compete aggressively on price and technology integration, often creating a zero-sum dynamic in the core contract labor space. This is evident in margin compression. For Cross Country Healthcare, Inc., the Contribution Margin for its core Nurse and Allied Staffing segment compressed to 7.0% in Q3 2025, down from 7.3% year-over-year, while its average daily revenue per FTE fell by 8% in the same period. AMN Healthcare Services, Inc. reported a consolidated gross margin of 29.8% in Q2 2025, compared to Cross Country Healthcare, Inc.'s 20.4% gross profit margin in Q2 2025.

Here's a quick look at how the core segments of the two major players fared in Q2 2025:

The pressure on the largest segment is a clear indicator of rivalry intensity. Consider the sequential and year-over-year performance of the Nurse and Allied Solutions segment for AMN Healthcare Services, Inc.:

• Q2 2025 Revenue: $382 million
• Q2 2025 YoY Revenue Change: -14%
• Q2 2025 Sequential Revenue Change: -8%
• Q3 2025 Revenue: $361 million
• Q3 2025 YoY Revenue Change: -9%

Rivals are fighting for every contract, which translates directly into lower realized rates for the incumbent providers. The market is definitely punishing scale when differentiation is not immediately translating to pricing power.

AMN Healthcare Services, Inc. (AMN) - Porter's Five Forces: Threat of substitutes

In-house permanent hiring by hospital systems is the primary substitute, cutting agency fees.

The shift away from contingent labor is evident in AMN Healthcare Services, Inc. (AMN)'s performance; S&P Global forecasts revenue for AMN Healthcare Services, Inc. (AMN) will decline by the high- to mid-single digits in 2025 following a 22% decline in the prior year. This reflects healthcare organizations prioritizing permanent staff to offset prior reliance on contingent labor. For instance, AMN Healthcare Services, Inc. (AMN)'s Nurse and Allied Solutions segment saw travel nurse revenue decrease by 44% year-over-year in the first quarter of 2025. The overall U.S. healthcare staffing market size is estimated to be $22.81 billion in 2025.

Technology-driven direct hiring platforms are gaining share by streamlining recruitment.

The digital recruitment space is growing, with the Global Digital Medical Recruitment Market size estimated at $2.3 billion in 2025. By the first quarter of 2025, 40% of these digital recruitment platforms had deployed machine-learning modules. AMN Healthcare Services, Inc. (AMN)'s investment in the Shiftwise Flex platform is a direct response to this technological substitution pressure.

Hospitals are pooling resources into staffing cooperatives to build internal talent pipelines.

While direct data on cooperative utilization is less explicit, the push for internal flexibility is strong. A survey indicated that 97% of hospitals plan to expand flexible staffing programs, which include internal float pools. This internal focus directly reduces the need for external agency support.

The decline in travel nurse demand is a direct substitution effect post-pandemic.

The market for travel nursing, a core area for AMN Healthcare Services, Inc. (AMN), is contracting. The travel nurse segment is projected to fall by another 20 percent in 2025. This decline is a direct substitution effect as hospitals work to rebuild sustainable workforces.

Telehealth and advanced practice providers substitute for some physician roles.

Virtual care is increasingly substituting for in-person physician encounters. A McKinsey & Company study estimates that up to $250 billion in U.S. healthcare spending could be virtualized. Furthermore, 56% of physicians intend to maintain telehealth integration in their practice models. Nearly 90% of people used some type of remote healthcare in the preceding year (2024).

Key Substitution Metrics as of Late 2025

You're looking at a clear market recalibration where the high-cost, on-demand staffing model is being actively replaced by internal hires and digital efficiencies. The numbers show the pressure is real, defintely.

Relevant Trends in Substitution Drivers:

• Physicians using telehealth regularly: Nearly three-fourths.
• Rural resident use of telehealth services: 73%.
• Telemedicine physician job compensation premium: 40% higher than traditional roles.
• Staffing agencies' top priority shift: Digital transformation (34% in 2023).

Finance: model sensitivity to a 5% further decline in travel nurse bill rates for Q3 2025 by Monday.

AMN Healthcare Services, Inc. (AMN) - Porter's Five Forces: Threat of new entrants

You're looking at the barriers for a new staffing firm trying to break into AMN Healthcare Services, Inc.'s market space as of late 2025. Honestly, the hurdles are substantial, which keeps the threat of de novo (newly created) entrants relatively low, though not zero.

Barriers to entry are high due to complex regulatory and credentialing requirements. New entrants must immediately grapple with a patchwork of state-by-state licensing rules, which can significantly slow down workforce deployment. For instance, navigating inconsistent state licensing requirements and protracted credentialing processes is a known challenge, especially when trying to onboard talent across state lines, which is essential for a national player like AMN Healthcare Services, Inc.. This regulatory maze acts as a significant, non-scalable cost for any newcomer.

New platform-based staffing models, leveraging AI, are challenging traditional scale. While technology is lowering some operational costs, the market is seeing a push toward digital integration. For example, AMN Healthcare Services, Inc. has its WorkWise technology suite and AMN Passport mobile career platform, which recently surpassed 300,000 users. A new entrant needs comparable, or superior, technology to compete for the same talent pool, which requires significant, upfront technology investment.

Establishing a nationwide network and brand trust is capital-intensive and slow. Healthcare providers rely on established relationships and proven reliability, especially in crisis situations. Building the necessary infrastructure-recruiting pipelines, compliance teams, and hospital contracts-takes years and deep pockets. The sheer size of the incumbent operation underscores this point; AMN Healthcare Services, Inc.'s Trailing Twelve Months (TTM) revenue of $2.71 billion shows the scale new entrants must match or surpass to gain meaningful market share. For context, their Q3 2025 revenue alone was $634.5 million.

The consolidation path shows that the market favors scale, often achieved through acquisition rather than organic growth. Acquisitions of smaller firms by private equity show a path for rapid consolidation. Private equity firms are actively consolidating the space; for example, in 2024, The Vistria Group acquired Soliant Health for $2.5 billion (which was 9.6x EBITDA). Furthermore, nearly 24% of healthcare staffing firms are majority-owned by private equity, indicating that the most likely new entrant is a well-capitalized PE-backed platform making an add-on acquisition, not a startup. A smaller, strategic acquisition, like TrueBlue's purchase of Healthcare Staffing Professionals (HSP) for $56 million in January 2025, demonstrates this lower-end consolidation strategy as well.

Here are the key structural elements that define the threat level:

• Regulatory compliance costs are high and variable.
• Brand trust is critical for securing high-margin contracts.
• Technology platforms require massive R&D spend.
• PE firms prefer buying scale over building it.

The competitive landscape for new entrants is defined by these financial and structural demands:

If onboarding takes 14+ days due to credentialing backlogs, churn risk rises for any new, unproven entity.