FIRST ADVANTAGE CORP

First Advantage Corporation is a global software and data company providing comprehensive, end-to-end identity solutions, criminal background screening, credential verifications, drug and health screening, and continuous risk monitoring. The company operates in the background screening and identity verification industry, which is described as highly fragmented and competitive, even as consolidation among larger firms increases. Key structural forces shaping competition include the rise of identity fraud, heightened regulatory and compliance scrutiny, executive-level focus on safety and compliance, elevated workforce mobility and voluntary employee churn, growth of contingent and flexible workforces, development of international markets, advances in analytics, investment in enterprise software, and growth in post-onboarding solutions. First Advantage conducts more than 200 million screens annually across over 200 countries and territories, supported by proprietary databases containing over 1 billion records.

First Advantage serves over 80,000 customers worldwide, including approximately two-thirds of the Fortune 100. The company's competitive advantages include its AI-powered proprietary technology platforms, proprietary internal databases of over 1 billion US criminal, education, and work history records, an extensive network of thousands of automated, integrated primary source and third-party data providers, a gross retention rate of approximately 96% as of December 31, 2025 ¹, and an average tenure of over 13 years among its top 100 customers ². The company competes with large players offering broad capabilities, vertical-focused specialist firms, mid-sized players, and SMB-focused competitors. Principal competitive factors include reliability of screening results, turnaround time, pricing, user experience, breadth of solutions, geographical reach, compliance expertise, and analytics capabilities.

First Advantage generates revenue primarily from pre-onboarding background screening and related products provided to customers on a transactional basis, where a background screening package or selection of products is ordered by a customer related to a single applicant. The company also generates revenue from post-onboarding monitoring, tax consulting, fleet management, and driver qualification services, which are delivered over time. The company's products are available individually or through packaged solutions configured according to customer needs. The company's technology integrates with more than 100 third-party Human Capital Management (HCM) software platforms and Applicant Tracking Systems (ATS). Approximately 86% of revenues for the year ended December 31, 2025 was generated in the U.S., while the remaining 14% was generated abroad ³.

First Advantage's product suite is classified into three categories: pre-onboarding, post-onboarding, and adjacent products. Pre-onboarding products include criminal background checks utilizing the proprietary National Criminal Records File database, drug and health screening (saliva, urine, hair, and blood testing, physical exams, and instant oral drug screening), identity checks and biometric fraud mitigation tools (government ID validation, liveness detection, digital fingerprint collection, telecom and device verification, facial recognition with biometric matching, Social Security number verification, and live video chat identification proofing), extended workforce screening, education and work history verification leveraging the proprietary Verified! Database and SmartHub technology, driver records and compliance, healthcare credentials through the HEAL product, FBI channeling, executive screening, and other products such as global sanctions, professional licenses verification, and social media checks. Post-onboarding solutions include criminal records monitoring, motor vehicle records monitoring, I-9 verification, healthcare sanctions monitoring, global sanctions and licenses monitoring, and social media monitoring. Adjacent products include fleet and vehicle compliance, hiring tax credits and incentives (including the Federal Work Opportunity Tax Credit program), and investigative research.

The company's technology platforms include Profile Advantage and Candidate Hub (applicant-facing mobile-first platforms), Enterprise Advantage and Screening Direct (core global ordering and processing technologies), and Insight Advantage and Analytics Hub (data visualization and analytics tools). The company's proprietary internal databases include the National Criminal Records File with well over 900 million criminal records ⁴ and Verified!, a repository of approximately 135 million records ⁵ primarily consisting of prior employment and education verification records. The company's technology integrates with more than 100 third-party HCM and ATS platforms ⁶. Recent product advancements include digital biometric identity verification with liveness detection, synthetic identity and deepfake detection, continuous criminal monitoring, mobile-first AI-enabled candidate experiences, AI-powered credential verifications (SmartHub), continuous driver monitoring (RoadReady), and instant oral drug testing.

On October 31, 2024, the company completed its acquisition of Sterling Check Corp., a global provider of technology-enabled background and identity verification services. In September 2023, the company acquired 100% of the equity interest of a U.S.-based digital identity and biometrics solutions company operating under the trade name Infinite ID. During the year ended December 31, 2025, the company made voluntary principal repayments of $65.0 million ⁷ on its outstanding term loan facility. On July 30, 2025, the company amended its 2024 First Lien Credit Agreement to reduce the interest rate on its term loan facility to a range of 2.50% to 2.75% ⁸, based on the first lien ratio, plus SOFR, and reduced the interest rate on its revolving credit facility to a range of 2.25% to 2.75% ⁹, based on the first lien ratio, plus SOFR. On February 25, 2026, the company's Board of Directors authorized the repurchase of up to $100.0 million ¹⁰ of the company's common stock with no expiration date. The company had no share repurchases during the year ended December 31, 2025 ¹¹.

For the year ended December 31, 2025, First Advantage generated revenues of $1,574.4 million ¹², an increase of 83.0% ¹³ compared to $860.2 million ¹⁴ for the year ended December 31, 2024. Net loss was $(34.8) million ¹⁵ for the year ended December 31, 2025, compared to $(110.3) million ¹⁶ for the year ended December 31, 2024. Net loss margin improved to (2.2)% ¹⁷ from (12.8)% ¹⁸ in the prior year. Adjusted EBITDA was $441.4 million ¹⁹ for the year ended December 31, 2025, compared to $249.3 million ²⁰ for the year ended December 31, 2024. Cash and cash equivalents were $240.0 million ²¹ as of December 31, 2025.

First Advantage's growth strategy focuses on winning new customers across diverse industry verticals, particularly those with strong long-term growth prospects such as e-commerce, essential retail, healthcare, transportation, and home delivery, as well as expanding into financial services and regulated industries. The company emphasizes Enterprise customers with complex global operations and durable growth profiles. The company also aims to grow within its existing customer base through upselling and cross-selling, as customers often begin with a few core products and subsequently expand usage to build a more comprehensive approach to screening and risk management. The company believes the revenue opportunity within its existing customer base remains significant, supported by strong upsell and cross-sell momentum.

First Advantage is focused on continuing to innovate its product offerings, including investments in criminal and verification data products and identity solutions. The company is enhancing its identity product suite to provide verification at every stage of the employee lifecycle, from applicant screening to ongoing workforce monitoring. The company is developing automation-enabled solutions that extend capabilities in biometric verification, fraud mitigation, and advanced data analytics. The company also plans to continue investing significantly in technology to sustain and advance its product leadership. Additionally, the company is well-positioned to expand its global presence as multinational corporations increasingly seek to standardize and strengthen human resources policies and screening practices globally, with a strategy focused on capturing opportunities by investing in localized compliance capabilities, multilingual platforms, and regional data partnerships.

The company's historical margin expansion has been largely driven by increased automation and deployment of RPA and AI technologies in the background screening process, which has increased speed, efficiency, quality, and operating leverage. The company has also gained operating leverage from efficiencies and managing general and administrative costs. The company expects that, over the long term, operating expenses as a percentage of total revenues will gradually decline as the business scales and advances operating efficiency and automation initiatives. Cost of services as a percentage of revenues was 54.3% ²² for the year ended December 31, 2025, compared to 52.2% ²³ for the year ended December 31, 2024, impacted by Sterling's higher relative cost of services driven by the segment's product and customer mix.

The company's operating model depends on the efficient and unimpeded operation of its global technology and data processing systems. The company currently operates data centers and servers around the world and relies on third-party cloud providers to host certain websites, databases, and web-based services. The company is currently integrating certain software and systems as a result of the Sterling Acquisition, which is complex and will require significant changes to its platforms. The company's Operation Centers of Excellence in Manila, Philippines, and in Bangalore and Mumbai, India provide critical support for operations by processing screening requests, performing manual review of records and verifications work, handling certain customer calls and interactions, and completing certain internal shared service support functions. As of December 31, 2025, the company had over 9,500 employees across 19 countries ²⁴.

The company's primary liquidity requirements are for working capital, debt service, ongoing investments in software development and other capital expenditures, as well as other strategic initiatives such as the integration of Sterling. As of December 31, 2025, the company had $240.0 million ²⁵ in cash and cash equivalents and $249.3 million ²⁶ available under its revolving credit facility. As of December 31, 2025, the company had $2,114.5 million ²⁷ of total debt outstanding. On February 25, 2026, the company's Board of Directors authorized the repurchase of up to $100.0 million ²⁸ of the company's common stock with no expiration date. The company does not intend to pay dividends for the foreseeable future. The company's capital expenditure plans are not explicitly quantified in the filing beyond capitalized software development costs and purchases of property and equipment.

Macroeconomic factors beyond the company's control, including the state of the economy, could impact demand and fulfillment costs for its products and solutions. A substantial majority of the company's revenues are derived from pre-onboarding screening products, which is heavily influenced by hiring volumes. Current macroeconomic conditions, including elevated interest rates, persistent inflation, and fluctuations in job openings and hiring activity, continue to affect portions of the global economy and create a more cautious posture across many employers. Global economic volatility, driven by geopolitical tensions, ongoing conflicts, evolving trade and tariff policies, monetary-policy uncertainty, and instability in certain international markets, has contributed to heightened variability in customer hiring plans. The company is also exposed to risks related to foreign currency exchange rate fluctuations, with principal exposures relating to the British Pound Sterling, Australian Dollar, and Canadian Dollar, and to a lesser extent the Indian Rupee, Singapore Dollar, and Chinese Renminbi.

The company operates in a highly regulated industry and is subject to numerous and evolving laws and regulations, including those governing consumer protection, privacy, and data protection. Continued scrutiny of the collection, use, and processing of personal data and data security could lead to increased restrictions, loss of revenue opportunity, greater costs of compliance, and lost efficiency. The company faces risks related to social, ethical, and legal issues relating to the use of new and evolving technologies, such as artificial intelligence and machine learning, in its offerings, which may result in reputational harm and liability. The company also faces risks related to failure to realize the expected benefits of the acquisition of Sterling, including challenges in integrating Sterling's business successfully and efficiently.

Macroeconomic factors beyond the company's control, including the state of the economy, could impact demand and fulfillment costs for its products and solutions, as a substantial majority of revenues are derived from pre-onboarding screening products heavily influenced by hiring volumes. The company operates in a highly regulated industry and is subject to numerous and evolving laws and regulations, including those governing consumer protection, privacy, and data protection, with fines under the GDPR of up to 20 million euros or up to 4% of annual global revenue ²⁹, whichever is greater. The company faces risks related to failure to realize the expected benefits of the acquisition of Sterling, which involved significant management attention and integration challenges. The company has a significant amount of indebtedness, with $2,114.5 million ³⁰ of total debt outstanding as of December 31, 2025, which could adversely affect its ability to raise additional capital, limit its ability to react to changes in the economy, and require a substantial portion of cash flow from operations to make debt payments. Silver Lake beneficially owned 51.4% ³¹ of the company's outstanding common stock as of December 31, 2025, giving it control over the company and the ability to determine corporate and management policies, which may conflict with the interests of other stockholders.

Management's message emphasizes the company's position as a global software and data company providing comprehensive identity solutions, criminal background screening, credential verifications, drug and health screening, and continuous risk monitoring. Management highlights that the company is well positioned to be a leader in the transformation of the industry from fragmented, point-in-time checks to continuous, identity and background intelligence across the full employee lifecycle. Key strategic priorities emphasized for the period ahead include continuing to win new customers across diverse industry verticals, particularly Enterprise customers with complex global operations; growing within the existing customer base through upselling and cross-selling; continuing to innovate product offerings including investments in criminal and verification data products and identity solutions; growing internationally as multinational corporations seek to standardize screening practices; and leveraging proprietary data to improve speed and accuracy, drive cost efficiencies, and create differentiated products. Management expresses confidence in the overall long-term health of the business, the strength of product offerings, and the ability to continue to execute on strategy despite macroeconomic changes.