First Advantage Achieves Strong Q3 Results Amid Growth Strategy

Third Quarter Highlights for First Advantage

First Advantage Corporation (NASDAQ: FA), a prominent provider of employment background screening and verification solutions, proudly announces its financial outcomes for the third quarter of 2024, highlighting several key accomplishments. During this period, the company generated revenues of $199.1 million and reported a net loss of $(8.9) million, reflecting a net loss margin of (4.4)%. Notably, this net loss included $13.2 million in expenses linked to the acquisition of Sterling Check Corp.

Solid Financial Performance

Despite the loss, First Advantage marked an adjusted net income of $38.0 million and an adjusted EBITDA of $64.0 million for the quarter, with an impressive adjusted EBITDA margin of 32.2%. The diluted net loss per share stood at $(0.06), but when adjustments for the acquisition-related expenses are considered, the adjusted diluted earnings per share reached $0.26, showcasing the company’s resilience in managing its operational costs and external challenges.

Operational Insights

In addition to strong financial metrics, First Advantage's cash flows from operations totaled $43.5 million. The company effectively maintained its full-year guidance for 2024, anticipating revenues between $750 million and $800 million and adjusted EBITDA in the range of $228 million to $248 million. Furthermore, it has issued combined company guidance owing to the impacts of Sterling's results for the last two months of the year.

Strategic Acquisitions and Growth Plans

With the successful acquisition of Sterling Check Corp. now finalized, First Advantage is poised to leverage increased synergy. The CEO, Scott Staples, expressed excitement about integrating the Sterling team, emphasizing their commitment to synergy targets that may yield up to $70 million within two years. The focus remains on enhancing operational efficiency and elevating customer experiences.

Future Guidance and Outlook

The leadership team at First Advantage, under CFO Steven Marks' guidance, is confident in the projections for revenue growth and improved margins due to the acquisition synergies and firming operational strategies. They expect sequential growth in revenues and adjusted EBITDA for the standalone First Advantage in the fourth quarter, maintaining a focus on integration and operational continuity.

Sustainability and Corporate Responsibility

During the third quarter, First Advantage also released its 2023 Sustainability Report, emphasizing its commitment to employee engagement and environmental sustainability. This enhanced focus on corporate responsibility aligns with the company's vision of a progressive business model.

Call to Action: Join the Conference Call

Investors are encouraged to participate in the upcoming conference call, where the management will delve deeper into the third-quarter results and strategic roadmap. Details regarding time and participation will be accessible through the company's investor relations platform.

Frequently Asked Questions

1. What were First Advantage's revenues for Q3 2024?

The revenues reported for Q3 2024 were $199.1 million.

2. What was the adjusted net income for First Advantage in Q3 2024?

The adjusted net income for Q3 2024 was $38.0 million.

3. What strategies is First Advantage implementing post-acquisition of Sterling?

First Advantage aims to integrate Sterling effectively and realizes cost synergies estimated between $50 million to $70 million within two years.

4. How has the company performed in terms of cash flow?

The company reported cash flows from operations amounting to $43.5 million for Q3 2024.

5. When is the upcoming conference call to discuss Q3 results?

The conference call is scheduled shortly after the earnings release on November 12, 2024, at 8:30 a.m. ET.

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