First Advantage — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenues for the three months ended September 30, 2026, were $465.8 million, representing a 13.8% year-over-year increase compared to $409.2 million in 2025.
• Net income was $20.5 million for the quarter, up from $2.6 million in the prior year period, with a net income margin of 4.4% compared to 0.6% in 2025.
• Diluted net income per share was $0.12, compared to $0.01 in the prior year.
• Adjusted EBITDA was $136.5 million, a 15.2% increase year-over-year from $118.5 million, with an Adjusted EBITDA margin of 29.3% compared to 29.0% in 2025.
• Adjusted Net Income was $67.3 million, a 28.6% increase year-over-year from $52.3 million.
• Adjusted Diluted Earnings Per Share was $0.38, a 26.7% increase year-over-year from $0.30.
• Cash flows from operations were $63.8 million for the quarter.
• Long-term debt (net of deferred financing costs) decreased to $1,990.9 million at September 30, 2026, from $2,080.0 million at December 31, 2025.
• Cash and cash equivalents were $240.9 million at September 30, 2026, compared to $240.0 million at December 31, 2025.
• Deferred revenues were $4.8 million at September 30, 2026, down from $5.0 million at December 31, 2025.

Guidance and Future Outlook:

• Full year 2026 revenue guidance was raised to $1.720 billion – $1.745 billion, up from the prior range of $1.670 billion – $1.710 billion.
• Full year 2026 Adjusted EBITDA guidance was raised to $488 million – $498 million, up from the prior range of $472 million – $486 million.
• Full year 2026 Adjusted Net Income guidance was raised to $227 million – $232 million, up from the prior range of $214 million – $225 million.
• Full year 2026 Adjusted Diluted Earnings Per Share guidance was raised to $1.30 – $1.33, up from the prior range of $1.23 – $1.29.
• Management expects to finish the year near or at the top end of the run rate synergy target range for the Sterling acquisition.
• The company plans to focus on driving operational efficiencies, supporting product innovation, and translating combination benefits into sustained growth, margin expansion, and cash flow generation.
• Deleveraging remains a high priority for capital allocation.

Business Segments and Product Lines:

• The company announced the acquisition of Data Diver Technologies, LLC, a data platform leveraging AI and automation for collecting, aggregating, retaining, and delivering high-volume criminal and court records.
• AI-enabled products are cited as key differentiators for helping customers mitigate human capital risks and prevent fraud.
• Growth is attributed to the revenue growth algorithm, including base growth, new logo contribution, upsell and cross-sell activity, and high retention.
• Broad-based growth was observed across diverse, balanced verticals, with strong performance from nearly every vertical in the Americas business.
• The company conducts over 200 million screens annually across over 200 countries and territories.

Market and Competitive Landscape:

• The company operates in a highly regulated industry and a penetrated and competitive market.
• First Advantage serves over 80,000 customers worldwide, including approximately two-thirds of the Fortune 100.
• The company leverages proprietary databases containing over 1 billion records.

Risks and Challenges:

• Risks include adverse changes in external events, macroeconomic cycles, interest rate volatility, inflation, geopolitical unrest, and changes in tax laws.
• The company faces risks related to evolving laws and regulations regarding personal data, data security, and artificial intelligence.
• Potential harm to business, brand, and reputation may result from security breaches, cyber-attacks, or mishandling of personal data.
• The company relies on third-party data providers and vendors for certain operations.
• Sales to government entities involve unique competitive, procurement, budget, and contractual risks.
• Risks include potential liability and legal proceedings due to the sensitive nature of products, errors or bugs in products, and disruptions at Operation Centers of Excellence.
• The company's indebtedness could adversely affect its ability to raise additional capital or react to economic changes.
• Silver Lake's significant ownership of common stock presents a potential conflict of interest.

Management Commentary and Tone:

• CEO Scott Staples described the quarter as "outstanding performance" with "sustained positive momentum" and "robust earnings per share growth."
• Staples noted that the company is "larger, stronger, and more diversified" following the two-year anniversary of the Sterling acquisition, with benefits exceeding original expectations.
• CFO Steven Marks expressed confidence in delivering "consistent profitable growth" and highlighted the success of the integration efforts and synergy program.
• Management emphasized that the low end of the updated full-year guidance ranges now exceeds the high end of the prior guidance ranges across every metric.

Other Key Points:

• The company announced a $45 million debt prepayment during the quarter.
• Share repurchases totaled $38.4 million for the nine months ended September 30, 2026.
• The Sterling acquisition closed two years prior to the release date, and integration benefits are being realized.
• The Data Diver Technologies acquisition aligns with the "FA 5.0 growth strategy."
• The company is unable to provide a reconciliation of future guidance for non-GAAP metrics to GAAP measures without unreasonable effort due to the inherent difficulty of forecasting adjusting items.