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First Advantage Reports Fourth Quarter and Full Year 2025 Results

globenewswire.com
FA The company reported strong financial results for Q4 and FY2025, exceeding revenue growth targets and demonstrating high customer retention. They also announced a new share repurchase program, underscoring confidence in future opportunities and a commitment to shareholder value.

Fourth Quarter 2025 Highlights 1

Full Year 2025 Highlights 1

Full Year 2026 Guidance

ATLANTA, Feb. 26, 2026 (GLOBE NEWSWIRE) -- First Advantage Corporation (NASDAQ: FA), a global software and data company, today announced financial results for the fourth quarter and full year ended December 31, 2025.

Key Financials

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

“In 2025, we delivered exceptional financial results with meaningful success across all pillars of our FA 5.0 growth strategy,” said Scott Staples, Chief Executive Officer. “Our targeted go-to-market approach enabled us to grow revenues and expand margins, resulting in revenue, Adjusted EBITDA, and Adjusted Diluted EPS growth in line with or above our long-term targets. During the year, we completed the core integration activities for the Sterling acquisition, maintained a high customer retention rate of 96%, strengthened our balance sheet, and made significant progress on the increased synergy target set in May, with $55 million of acquisition synergies actioned through year end. Our customers continue to express high levels of interest in our best-of-breed solutions as we expand our technology and product offerings to enhance our value proposition, including leveraging AI to transform customer and applicant experiences.”

Staples continued, “We closed 2025 with outstanding performance in the fourth quarter, again demonstrating our ability to deliver positive results in a relatively flat hiring environment. We generated impressive combined upsell, cross sell, and new logo growth of 17%, exceeding our long-term revenue growth algorithm, alongside excellent customer retention of 97% in Q4. Our go-to-market strategy drove momentum in our targeted verticals and geographies during the quarter, with particular strength in retail & e-commerce, general staffing, transportation & logistics, and healthcare verticals, and continued consistent international sales growth.

With the core Sterling integration activities completed, we are well-positioned to maximize the benefits of our combined business and enhance our competitive strengths. Building upon the great success we have seen to date with our FA 5.0 growth strategy, in 2026, we are making strategic investments in our go-to-market and product capabilities to accelerate organic revenue growth. We are confident that we are positioned to further increase our momentum and deliver meaningful, sustained value for our customers and shareholders,” Staples concluded.

Share Repurchase Program

Today, First Advantage announced that its Board of Directors has approved a share repurchase program with authorization to purchase up to $100 million of its common stock with no expiration date.

“This program underscores our confidence in our business and conviction in our attractive long-term opportunities,” commented Steven Marks, EVP and Chief Financial Officer. “Within our capital allocation framework, we consider current market conditions and view share repurchases at today’s valuation levels as a highly attractive use of capital, while maintaining a balanced focus on liquidity and shareholder value creation. Our commitment to disciplined balance sheet management and focus on deleveraging remains, evidenced by our $25 million voluntary debt prepayment to be made in late February, as we expect to continue reducing net leverage toward our long-term target of 2x to 3x.”

Full Year 2026 Guidance

“We are pleased to be commencing 2026 in a strong position, building upon our momentum of 27% Adjusted Diluted EPS growth in 2025. Our full year 2026 guidance reflects confidence in our ability to continue to deliver positive results powered by disciplined execution, go-to-market excellence, and a relentless focus on our customers,” commented Marks. “Our guidance takes into consideration our latest view of expected product mix, our targeted investments, the realization of synergies already actioned or expected to be actioned in 2026, and our latest view of the macroeconomic environment and labor market. We remain committed to delivering on our objectives, generating profitable growth with strong free cash flow and consistent deleveraging.”

The following table summarizes our full year 2026 guidance.

Actual results may differ materially from First Advantage’s full year 2026 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 2025 results today, February 26, 2026, at 8:30 a.m. ET.

To participate in the conference call, please dial 800-225-9448 (domestic) or 203-518-9708 (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 2025 earnings call or provide the conference code FA4Q25. 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/5179695/3B5073CD5631AA2BE2C785CFEC3D8000.

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:

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, 2024, 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, including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which is expected to be filed after this press release, 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,” and “Adjusted Operating Cash Flow.”

Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Diluted Earnings Per Share 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, and Adjusted Diluted Earnings Per Share 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, and Adjusted Diluted Earnings Per Share are not recognized terms under GAAP and should not be considered as an alternative to net 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.

We define Adjusted EBITDA as net income (loss) 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 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.

Additionally, we use Adjusted Operating Cash Flow to review the liquidity of our operations. We define Adjusted Operating Cash Flow as cash flows from operating activities adjusted for cash costs directly associated with the Sterling acquisition and related integration. We believe Adjusted Operating Cash Flow is a useful supplemental financial measure for management and investors in assessing the Company’s ability to pursue business opportunities and investments and to service its debt. Adjusted Operating Cash Flow is not a measure of our liquidity under GAAP and should not be considered as an alternative to cash flows from operating activities.

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.

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.

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.

Share Repurchase Program

Stock repurchases may be effected through open market repurchases at prevailing market prices (including through the use of block trades and trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended), privately-negotiated transactions, through other transactions in accordance with applicable securities laws, or a combination of these methods on such terms and in such amounts as the Company deems appropriate. The Company is not obligated to repurchase any specific number of shares, and the timing, manner, value, and actual number of shares repurchased will depend on a variety of factors, including the Company’s stock price and liquidity requirements, other business considerations, and general market and economic conditions. The Company may discontinue or modify purchases without notice at any time. The Company plans to use its existing cash to fund repurchases made under the share repurchase program. No shares will be purchased from Silver Lake or its affiliates.

About First Advantage

First Advantage (NASDAQ: FA) is a global software and data company. We provide comprehensive, end-to-end identity solutions, criminal background screening, credential verifications, drug and health screening, and continuous risk monitoring. Combining AI-powered proprietary technology platforms with proprietary data, primary source data, and third-party data, we help organizations hire with confidence and manage risk across the entire employee lifecycle. With over 80,000 customers worldwide – including approximately two-thirds of the Fortune 100 – we deliver fast, comprehensive, and reliable solutions for employers, their candidates, and their employees. We conduct more than 200 million screens annually across over 200 countries and territories, supported by our verticalized go-to-market strategy, decades of experience, and proprietary databases containing over 1 billion records. For more information, please visit our website at https://fadv.com/.

Investor Contact

Stephanie Gorman

Vice President, Investor Relations

Investors@fadv.com

(678) 868-4151

Condensed Financial Statements

Reconciliation of Consolidated Non-GAAP Financial Measures

Reconciliation of Consolidated Non-GAAP Financial Measures (continued)