First Advantage Reports Fourth Quarter and Full Year 2024 Results

First Advantage Corporation, a leading global provider of employment background screening, identity, and verification solutions, has released its financial results for the fourth quarter and full year ended December 31, 2024. The company also provided guidance for the full year 2025, reflecting the expected benefits of its recent acquisition of Sterling Check Corp.

Financial Highlights

For the full year 2024, First Advantage reported revenues of $860.2 million, a net loss of $(110.3) million, and an adjusted net income of $123.7 million. The adjusted EBITDA stood at $249.3 million, with an adjusted EBITDA margin of 29.0%. The GAAP diluted net loss per share was $(0.74), while the adjusted diluted earnings per share were $0.82. Cash flows from operations were $28.2 million, and adjusted operating cash flows were $164.5 million after accounting for acquisition-related costs.

In the fourth quarter of 2024, the company reported revenues of $307.1 million, a net loss of $(100.4) million, and an adjusted net income of $30.2 million. The adjusted EBITDA for the quarter was $82.9 million, with an adjusted EBITDA margin of 27.0%. The GAAP diluted net loss per share was $(0.62), and the adjusted diluted earnings per share were $0.18. Cash flows from operations for the quarter were $(85.7) million, and adjusted operating cash flows were $39.4 million.

Business and Operational Highlights

The acquisition of Sterling Check Corp. was completed on October 31, 2024, which significantly impacted the financial results. The acquisition incurred $130.5 million in expenses for the full year and $97.1 million for the fourth quarter. The integration of Sterling is progressing well, with $20 million in run rate cost synergies already actioned. The company has updated its run rate synergy target range to $60 million to $70 million.

Strategic Initiatives and Corporate Developments

First Advantage is focusing on growth and innovation through new technologies, AI, and product initiatives. The company is also working on refining its strategy to prioritize these areas. The acquisition of Sterling is expected to enhance the company's scale and operational capabilities, contributing to its long-term growth strategy.

Management's Perspective

Scott Staples, Chief Executive Officer, highlighted the transformational acquisition of Sterling as a milestone for the company. He emphasized the progress in integration efforts and the realization of synergy targets. Staples also noted the company's solid performance amid an uncertain macroeconomic environment, with combined revenues of approximately $1.51 billion and nearly $397 million of adjusted EBITDA in 2024.

Future Outlook

For the full year 2025, First Advantage has provided guidance ranges, including 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 $1.03. The guidance reflects the expected benefits of synergies from the Sterling acquisition and a cautious approach to growth due to macroeconomic uncertainties.

SEC Filing: FIRST ADVANTAGE CORP [ FA ] - 8-K - Feb. 27, 2025