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First Advantage Reports First Quarter 2024 Results
May 9, 2024

First Advantage Corporation reported its Q1 2024 financial results, showing revenues of $169.4 million and a net loss of $2.9 million due to acquisition-related costs. The company announced an adjusted net income of $24.8 million and adjusted EBITDA of $46.6 million. The acquisition of Sterling Check Corp. is progressing well, with expected benefits for both companies' customers. First Advantage is reaffirming its full-year 2024 guidance with revenue projections between $750 million and $800 million. The company continues to leverage AI and machine learning to enhance its services, including the new RightID fraud solution and the Profile Advantage platform.

First Quarter 2024 Highlights¹

  • Revenues of $169.4 million

  • Net Loss of $(2.9) million, after $11.1 million of costs related to the acquisition of Sterling Check Corp. (“Sterling”)

  • Adjusted Net Income of $24.8 million

  • Adjusted EBITDA of $46.6 million

  • GAAP Diluted Net Loss Per Share of $(0.02), after $0.08 per share of costs related to the acquisition of Sterling

  • Adjusted Diluted Earnings Per Share of $0.17

  • Cash Flows from Operations of $38.3 million

  • Acquisition of Sterling, announced on February 29, 2024, continues to progress towards closing.

Reaffirming Standalone First Advantage Full-Year 2024 Guidance

  • Reaffirming full-year 2024 guidance ranges for Revenues of $750 million to $800 million, Adjusted EBITDA of $228 million to $248 million, Adjusted Net Income of $127 million to $142 million, and Adjusted Diluted Earnings Per Share of $0.88 to $0.98²

ATLANTA, May 09, 2024  -- First Advantage Corporation (NASDAQ: FA), a leading provider of employment background screening, identity, and verification solutions, today announced financial results for the first quarter ended March 31, 2024.

Key Financials
(Amounts in millions, except per share data and percentages)


Three Months Ended March 31,
2024 2023 Change
Revenues $ 169.4 $ 175.5 (3.5 )%
(Loss) income from operations $ (0.7 ) $ 11.3 NM
Net (loss) income $ (2.9 ) $ 1.9 NM
Net (loss) income margin (1.7 )% 1.1 % NA
Diluted net (loss) income per share $ (0.02 ) $ 0.01 NM
Adjusted EBITDA¹ $ 46.6 $ 48.6 (4.1 )%
Adjusted EBITDA Margin¹ 27.5 % 27.7 % NA
Adjusted Net Income¹ $ 24.8 $ 28.4 (12.6 )%
Adjusted Diluted Earnings Per Share¹ $ 0.17 $ 0.19 (10.5 )%
¹ Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Diluted Earnings Per Share are non-GAAP measures. Please see the schedules accompanying this earnings release for a reconciliation of these measures to their most directly comparable respective GAAP measures.
Note: "NA" indicates not applicable information; "NM" indicates not meaningful information.

“We delivered first quarter financial results at-or-above what we communicated on our fourth quarter earnings call. Additionally, upsell, cross-sell, new logos, and retention rates continued to perform in line with our historical revenue growth algorithm. I am proud that our team continues to deliver on our commitments and is dedicated to creating value across the company,” said Scott Staples, Chief Executive Officer.

“We continue to make significant progress against our strategic initiatives as we leverage generative AI and machine learning across our organization. In March, we announced the next generation of our proprietary RightID™ identity fraud solution in the U.S. This tool helps to flag potential job applicant fraud in the pre-hire process, thus moving our products upstream in the applicant onboarding cycle. Additionally, we continue to enhance our customer value proposition with our next generation, AI-enabled, Profile Advantage® platform, our SmartHub™ verifications router, within operations, and in our Customer Care department,” added Staples.

“It has been an exciting and productive few months since announcing our agreement to acquire Sterling and the transaction process is progressing. We have formed an integration management committee and are currently progressing through the required regulatory reviews. This acquisition will extend our high-quality and cost-effective background screening, identity, and verification technology solutions for the benefit of both companies' customers. The acquisition of Sterling will be a significant step forward in our value creation playbook and we expect it will accelerate and advance our strategic priorities,” Staples concluded.

Liquidity, Cash Flow, and Capital Allocation

As of March 31, 2024, First Advantage had cash and cash equivalents of $245.4 million, short-term investments of $0.6 million, and total debt of $564.7 million.

During the first quarter of 2024, the Company generated $38.3 million of cash flow from operations and invested $6.5 million in purchases of property and equipment, including capitalized software development costs.

“Today, we are reaffirming our full-year 2024 guidance after having performed at-or-above what we communicated for the first quarter,” commented David Gamsey, EVP and Chief Financial Officer. “Upon closing the Sterling transaction, our priorities will focus on our customers, a successful integration, achieving synergies, and reducing net leverage. We remain committed to driving long-term value creation for First Advantage’s customers, employees, partners, and shareholders.”

Standalone First Advantage Full-Year 2024 Guidance

The following table summarizes our full-year 2024 guidance, which excludes contributions from the pending Sterling acquisition and will be adjusted accordingly upon closing:


As of May 9, 2024
Revenues $750 million – $800 million
Adjusted EBITDA² $228 million – $248 million
Adjusted Net Income² $127 million – $142 million
Adjusted Diluted Earnings Per Share² $0.88 – $0.98
² A reconciliation of the foregoing guidance for the non-GAAP metrics of Adjusted EBITDA and Adjusted Net Income to GAAP net (loss) income and Adjusted Diluted Earnings Per Share to GAAP diluted net (loss) income per share cannot be provided without unreasonable effort because of the inherent difficulty of accurately forecasting the occurrence and financial impact of the various adjusting items necessary for such reconciliation that have not yet occurred, are out of our control, or cannot be reasonably predicted. For the same reasons, the Company is unable to assess the probable significance of the unavailable information, which could have a material impact on its future GAAP financial results.

The Company’s full-year 2024 guidance ranges reflect the current hiring environment and expectations that existing macroeconomic conditions and similar labor market trends will continue throughout 2024, with the high-end of the guidance ranges reflecting some macroeconomic recovery towards year end. Adjusted Net Income and Adjusted Diluted Earnings Per Share guidance ranges include the impacts from the 2023 one-time special dividend, expired interest rate swaps, and share buybacks.

Actual results may differ materially from First Advantage’s full-year 2024 guidance as a result of, among other things, the factors described under “Forward-Looking Statements” below.

Conference Call and Webcast Information

First Advantage will host a conference call to review its first quarter 2024 results today, May 9, 2024, at 8:30 a.m. ET.

To participate in the conference call, please dial 800-343-4136 (domestic) or 203-518-9843 (international) approximately ten minutes before the 8:30 a.m. ET start. Please mention to the operator that you are dialing in for the First Advantage first quarter 2024 earnings call or provide the conference code FA1Q24. The call will also be webcast live on the Company’s investor relations website at https://investors.fadv.com under the “News & Events” and then “Events & Presentations” section, where related presentation materials will be posted prior to the conference call.

Following the conference call, a replay of the webcast will be available on the Company’s investor relations website, https://investors.fadv.com. Alternatively, the live webcast and subsequent replay will be available at https://event.on24.com/wcc/r/4554792/B404AD9649736455ED42ABD3D2A662F3.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, our operations and financial performance. Forward-looking statements include all statements that are not historical facts. These forward-looking statements relate to matters such as our industry, business strategy, goals, and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources, and other financial and operating information. In some cases, you can identify these forward-looking statements by the use of words such as “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future,” “will,” “seek,” “foreseeable,” "target," “guidance,” the negative version of these words, or similar terms and phrases.

These forward-looking statements are subject to various risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify. Such risks and uncertainties include, but are not limited to, the following:

  • negative changes in external events beyond our control, including our customers’ onboarding volumes, economic drivers which are sensitive to macroeconomic cycles, such as interest rate volatility and inflation, geopolitical unrest, and uncertainty in financial markets;

  • our operations in a highly regulated industry and the fact that we are subject to numerous and evolving laws and regulations, including with respect to personal data, data security, and artificial intelligence;

  • inability to identify and successfully implement our growth strategies on a timely basis or at all;

  • potential harm to our business, brand, and reputation as a result of security breaches, cyber-attacks, or the mishandling of personal data;

  • our reliance on third-party data providers;

  • due to the sensitive and privacy-driven nature of our products and solutions, we could face liability and legal or regulatory proceedings, which could be costly and time-consuming to defend and may not be fully covered by insurance;

  • our international business exposes us to a number of risks;

  • the timing, manner and volume of repurchases of common stock pursuant to our share repurchase program;

  • the continued integration of our platforms and solutions with human resource providers such as applicant tracking systems and human capital management systems as well as our relationships with such human resource providers;

  • our ability to obtain, maintain, protect and enforce our intellectual property and other proprietary information;

  • disruptions, outages, or other errors with our technology and network infrastructure, including our data centers, servers, and third-party cloud and internet providers and our migration to the cloud;

  • our indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, and prevent us from meeting our obligations;

  • the failure to complete or realize the expected benefits of our acquisition of Sterling Check Corp.; and

  • control by our Sponsor, "Silver Lake", (Silver Lake Group, L.L.C., together with its affiliates, successors, and assignees) and its interests may conflict with ours or those of our stockholders.

For additional information on these and other factors that could cause First Advantage’s actual results to differ materially from expected results, please see our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”), as such factors may be updated from time to time in our filings with the SEC, which are or will be accessible on the SEC’s website at www.sec.gov. The forward-looking statements included in this press release are made only as of the date of this press release, and we undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as required by law.

Non-GAAP Financial Information

This press release contains “non-GAAP financial measures” that are financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”). Specifically, we make use of the non-GAAP financial measures “Adjusted EBITDA,” “Adjusted EBITDA Margin,” “Adjusted Net Income,” “Adjusted Diluted Earnings Per Share,” “Constant Currency Revenues,” and “Constant Currency Adjusted EBITDA.”

Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Diluted Earnings Per Share, Constant Currency Revenues, and Constant Currency Adjusted EBITDA have been presented in this press release as supplemental measures of financial performance that are not required by or presented in accordance with GAAP because we believe they assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Management believes these non-GAAP measures are useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate, and capital investments. Management uses Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Diluted Earnings Per Share, Constant Currency Revenues, and Constant Currency Adjusted EBITDA to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, to establish discretionary annual incentive compensation, and to compare our performance against that of other peer companies using similar measures. Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone.

Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Diluted Earnings Per Share, Constant Currency Revenues, and Constant Currency Adjusted EBITDA are not recognized terms under GAAP and should not be considered as an alternative to net (loss) income as a measure of financial performance or cash provided by operating activities as a measure of liquidity, or any other performance measure derived in accordance with GAAP. The presentations of these measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Because not all companies use identical calculations, the presentations of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company.

We define Adjusted EBITDA as net (loss) income before interest, taxes, depreciation, and amortization, and as further adjusted for loss on extinguishment of debt, share-based compensation, transaction and acquisition-related charges, integration and restructuring charges, and other non-cash charges. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenues. We define Adjusted Net Income for a particular period as net (loss) income before taxes adjusted for debt-related costs, acquisition-related depreciation and amortization, share-based compensation, transaction and acquisition-related charges, integration and restructuring charges, and other non-cash charges, to which we then apply the related effective tax rate. We define Adjusted Diluted Earnings Per Share as Adjusted Net Income divided by adjusted weighted average number of shares outstanding—diluted. We define Constant Currency Revenues as current period revenues translated using prior-year period exchange rates. We define Constant Currency Adjusted EBITDA as current period Adjusted EBITDA translated using prior-year period exchange rates. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures, see the reconciliations included at the end of this press release. Numerical figures included in the reconciliations have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them.

About First Advantage

First Advantage (NASDAQ: FA) is a leading provider of employment background screening, identity, and verification solutions. The Company delivers innovative services and insights that help customers manage risk and hire the best talent. Enabled by its proprietary technology, First Advantage helps companies protect their brands and provide safer environments for their customers and their most important resources: employees, contractors, contingent workers, tenants, and drivers. Headquartered in Atlanta, Georgia, First Advantage performs screens in over 200 countries and territories on behalf of its more than 30,000 customers. For more information about First Advantage, visit the Company’s website at https://fadv.com/.

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