First Advantage Reports Fourth Quarter and Full Year 2024 Results

Completed Acquisition of Sterling; Issues Full Year 2025 Guidance

Full Year 2024 Highlights(1)

   -- Revenues of $860.2 million 
 
   -- Net Loss of $(110.3) million, a net loss margin of (12.8)%, includes 
      $130.5 million of expenses incurred related to the acquisition of 
      Sterling Check Corp. ("Sterling") 
 
   -- Adjusted Net Income of $123.7 million 
 
   -- Adjusted EBITDA of $249.3 million; Adjusted EBITDA Margin of 29.0% 
 
   -- GAAP Diluted Net Loss Per Share of $(0.74), includes $0.66 per share of 
      expenses incurred related to the Sterling acquisition 
 
   -- Adjusted Diluted Earnings Per Share of $0.82 
 
   -- Cash Flows from Operations of $28.2 million; Adjusted Operating Cash 
      Flows of $164.5 million, after adjusting for $136.3 million of cash costs 
      directly associated with the Sterling acquisition 
 
   -- Closed the Sterling acquisition on October 31, 2024, which was first 
      announced on February 29, 2024 

Fourth Quarter 2024 Highlights(1)

   -- Revenues of $307.1 million 
 
   -- Net Loss of $(100.4) million, a net loss margin of (32.7)%, includes 
      $97.1 million of expenses incurred related to the acquisition of Sterling 
 
   -- Adjusted Net Income of $30.2 million 
 
   -- Adjusted EBITDA of $82.9 million; Adjusted EBITDA Margin of 27.0% 
 
   -- GAAP Diluted Net Loss Per Share of $(0.62), includes $0.43 per share of 
      expenses incurred related to the Sterling acquisition 
 
   -- Adjusted Diluted Earnings Per Share of $0.18 
 
   -- Cash Flows from Operations of $(85.7) million; Adjusted Operating Cash 
      Flows of $39.4 million, after adjusting for $125.1 million of cash costs 
      directly associated with the Sterling acquisition 

Full Year 2025 Guidance

   -- Introducing full year 2025 guidance ranges, including the expected 
      benefits of synergies, for Revenues of $1.5 billion to $1.6 billion, 
      Adjusted EBITDA of $410 million to $450 million, Adjusted Net Income of 
      $152 million to $182 million, and Adjusted Diluted Earnings Per Share of 
      $0.86 to $1.032 

ATLANTA, Feb. 27, 2025 (GLOBE NEWSWIRE) -- First Advantage Corporation $(FA)$, a leading global provider of employment background screening, identity, and verification solutions, today announced financial results for the fourth quarter and full year ended December 31, 2024.

Key Financials

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

 
               Three Months Ended           Year Ended 
                  December 31,              December 31, 
               2024         2023         2024         2023 
-----------   -------      -------      -------      ------ 
Revenues      $ 307.1      $ 202.6      $ 860.2      $763.8 
(Loss) 
 income from 
 operations   $ (80.7)     $  29.4      $ (62.4)     $ 81.5 
Net (loss) 
 income       $(100.4)     $  14.8      $(110.3)     $ 37.3 
Net (loss) 
 income 
 margin         (32.7)%        7.3%       (12.8)%       4.9% 
Diluted net 
 (loss) 
 income per 
 share        $ (0.62)     $  0.10      $ (0.74)     $ 0.26 
Adjusted 
 EBITDA(1)    $  82.9      $  68.2      $ 249.3      $237.6 
Adjusted 
 EBITDA 
 Margin(1)       27.0%        33.7%        29.0%       31.1% 
Adjusted Net 
 Income(1)    $  30.2      $  42.6      $ 123.7      $145.8 
Adjusted 
 Diluted 
 Earnings 
 Per 
 Share(1)     $  0.18      $  0.29      $  0.82      $ 1.00 
 

(1 Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Diluted Earnings Per Share, and Adjusted Operating Cash Flow 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.)

"2024 was a milestone year for First Advantage as we advanced our strategy with the transformational acquisition of Sterling," said Scott Staples, Chief Executive Officer. "We are progressing well on our integration efforts, actioning and realizing our synergy targets, and accelerating our strategic execution, all while enabling a seamless experience for customers. We have already actioned $20 million in run rate cost synergies, and we are pleased to announce that we have updated our run rate synergy target range from $50 million to $70 million previously to $60 million to $70 million. Alongside our efforts on the transaction, we have been refining our updated strategy that prioritizes growth and innovation of our business through new technologies, AI, and product initiatives."

"For the full year and fourth quarter of 2024, we delivered solid results amid an uncertain macroeconomic environment. Considering the pre-acquisition results from Sterling, the combined company generated approximately $1.51 billion of revenues and nearly $397 million of Adjusted EBITDA in 2024. The combination of upsell, cross-sell, and new logo growth rates for the year for both First Advantage and Sterling performed in line with the respective historical revenue growth algorithms, and our team continued to demonstrate outstanding execution with important new logo and upsell bookings," Staples concluded.

Full Year 2025 Guidance

"We are introducing our full year 2025 guidance, which includes our increased scale with the acquisition of Sterling and the expected benefits of synergies," commented Steven Marks, Chief Financial Officer. "Our full year 2025 guidance ranges reflect the realization of synergies already actioned or expected to be actioned in 2025, our prudent posture towards growth in 2025 due in part to our expectation that base will remain a headwind through the middle of the year as we fully lap prior year base declines, and our latest view of the macroeconomic environment and labor market. In the year ahead, we plan to maintain our product and customer focus while continuing the integration process, maintaining customer continuity, actioning synergies, and reducing net leverage."

The following table summarizes our full year 2025 guidance.

 
                                        As of February 27, 2025 
--------------------------------------  ---------------------------- 
Revenues                                $1.5 billion -- $1.6 billion 
Adjusted EBITDA(2)                      $410 million -- $450 million 
Adjusted Net Income(2)                  $152 million -- $182 million 
Adjusted Diluted Earnings Per Share(2)         $0.86 -- $1.03 
 

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.

Actual results may differ materially from First Advantage's full-year 2025 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 fourth quarter and full year 2024 results today, February 27, 2025, at 8:30 a.m. ET.

To participate in the conference call, please dial 800-445-7795 (domestic) or 785-424-1699 (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 fourth quarter and full year 2024 earnings call or provide the conference code FA4Q24. 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/4818015/A54E8C5466B3E71E29525C125548AFA6.

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.

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February 27, 2025 06:30 ET (11:30 GMT)