Q4 2024 First Advantage Corp Earnings Call

February 27, 2025

Hum.

No.

Okay.

To all sites.

Appreciate your patience and ask that you. Please continue to stand.

Sure.

Mhm.

Thanks.

Hum.

Okay.

Yeah.

Uh huh.

Okay.

Yeah.

Okay.

Hum.

Great.

Okay.

No no no.

Uh-huh.

Hmm.

Uh huh.

[music].

Yeah.

No no no.

Uh huh.

Hello.

I don't know.

Uh huh.

And all of them.

Right.

Okay.

Oh no no no no.

Uh-huh involved.

Okay.

Oh no no.

[music].

Uh huh.

Okay.

I don't know.

Okay.

Yeah.

Okay.

Uh huh.

[music].

Oh no no.

No no no not at all.

[music].

So.

[music].

Hum.

[music].

Hum.

Thanks, Tom.

We appreciate your patience.

Stan.

[music].

Hum.

[music] Oh.

Hum.

Awesome.

[music].

Patients website.

To facilitate comparability, we will also discuss pro forma combined company results.

Casino first advantage and Sterling check for historical results and certain pro forma adjustments as if the acquisition of Sterling had occurred on January one 2023.

Okay.

[music].

The pro forma information does not constitute article 11 pro forma information.

Okay.

What's that.

One of them.

Speaker Change: I am joined on our call today by Scott <unk>, Our Chief Executive Officer, and Steve and Mark <unk>, Our Chief Financial Officer. After our prepared remarks, we will take your questions I will now hand, the call over to Scott.

One of them.

Uh huh.

Okay.

Oh.

Yes.

Scott: Thank you Stephanie and good morning, everyone.

Yeah.

Speaker Change: Thank you for joining our call.

Uh huh.

Speaker Change: 24 was a big year for first advantage as we advance our strategy and announced and closed on the Sterling acquisition.

Mhm.

Thank you.

Okay.

Yeah.

Hum.

Okay.

Speaker Change: I am very proud of our team's dedication to execution.

Oh.

Speaker Change: Currently delivering results keeping our customers at the center of everything we do.

Oh no no no.

No no no no.

Okay.

I am also excited to provide an update on our fourth quarter and full year accomplishments and to discuss our outlook for 2025.

Okay.

[music].

Okay.

Uh huh.

Speaker Change: We have four key messages for today.

Hum.

Speaker Change: We generated solid results for the fourth quarter and full year amid an uncertain macro environment. We also maintained our cost discipline to sustain robust margins within the legacy first advantage business and produce strong cash flow.

Mhm mhm.

Oh, Oh Oh.

Uh-huh.

Yeah.

[noise] [music].

Speaker Change: Second as you know we closed on our $2 $2 billion strategic acquisition of Sterling.

Speaker Change: Which leads me to the third point that we are underway in rolling out our updated strategy, which we call <unk> five dot O.

Mhm.

Hum.

Yeah.

Speaker Change: And as we discussed last quarter, our organization and management team have been optimized to deliver growth.

Okay.

Yes.

Please standby your program.

Speaker Change: With the additional scale and capabilities of Sterling and F 35 that Oh, we are accelerating our strategic progress.

Okay.

Mhm.

Speaker Change: Good day, everyone. My name is David and I'll be your conference operator today I would like to welcome you to the first advantage fourth quarter and full year 2024 earnings conference call and webcast hosting today's call from first advantage is DFT Corbin Vice president of Investor.

Speaker Change: Our key strategic objectives in 2025 are to action our synergy targets.

Speaker Change: Leverage our balance sheet successfully execute our integration plan and accelerate our go to market strategy focused on product technology and innovation.

Speaker Change: At this time, all participants have been placed in a listen only mode to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

Speaker Change: We are tracking well on our synergy execution and today, we are pleased to be increasing the lower end of our targeted range with our updated net cost synergy target range of $60 million to $70 million, an improvement from our previous target range of $50 million to $70 million.

Speaker Change: I would like to ask a question during that time. Please press star one on your telephone keypad. If at any point. Your question has been answered you may remove yourself from the queue by pressing star in Q.

Speaker Change: Over time, our synergy realization will help to stabilize and expand sterling margins.

Speaker Change: Lastly, if you should require operator assistance. Please press Star then zero.

Speaker Change: Please note today's event is being recorded.

Speaker Change: We are focused on deleveraging our balance sheet and have gotten to a fast start on the sterling integration, while continuing to provide our customers with the service and quality. They know they can expect from us.

Speaker Change: It is my pleasure to turn the call over to Stephanie Goldman.

Speaker Change: To begin.

Stephanie Goldman: Thank you David and good morning, everyone and welcome to first advantage its fourth quarter and full year 2024 earnings conference call.

Speaker Change: At the same time, we are maintaining our focus on innovation in order to position our business for future growth.

Stephanie Goldman: In the investors section of our website, you'll find the earnings press release and slide presentation to accompany today's discussion.

Speaker Change: And fourth we are introducing our full year 2025 guidance, we are entering 2025 and a strong business position encouraged by recent pipeline success, reducing headwinds as recent jolts data continues to normalize and feedback from our customers.

Stephanie Goldman: Webcast is being recorded and will be available for replay on our Investor Relations website.

Stephanie Goldman: Before we begin our prepared remarks, I would like to remind everyone that our discussion today will include forward looking statements such.

Stephanie Goldman: Such forward looking statements are not guarantees of future performance.

Speaker Change: That said in view of the current macro environment, which continues to be uncertain, we are maintaining a cautiously optimistic outlook.

Stephanie Goldman: Results may differ materially from those expressed or implied in the forward looking statements due to a variety of factors. These factors are discussed in more detail in our filings with the SEC, including our 2023.

Speaker Change: Steven will cover our guidance and key assumptions in greater detail in the financial section shortly.

Stephanie Goldman: And our 2024 Form 10-K to be filed with the SEC such factors may be updated from time to time in our periodic filings with the SEC and we do not undertake any obligation to update forward looking statements.

Speaker Change: We remain confident in our strategy and are positioned to create long term shareholder value in 2025 and beyond.

Speaker Change: In view of the New U S Administration I also wanted to share a few comments on potential policy impacts on our business we.

Stephanie Goldman: Throughout this conference call. We will also present and discuss the non-GAAP financial measures reconciliations of our non-GAAP financial measures to their most directly comparable GAAP financial measure to the extent available without unreasonable effort appear in today's earnings press release and presentation, which are available on our Investor Relations website.

Speaker Change: We do not have meaningful direct exposure to federal government hiring and therefore do not expect to be directly impacted by efforts to streamline federal government spending.

Speaker Change: In some respects government efficiency efforts could potentially be a tailwind for first advantage. If there are efforts to outsource and prioritize work that is currently done by the government.

Stephanie Goldman: To facilitate comparability, we will also discuss pro forma combined company results since Athena first advantage and Sterling check for historical results and certain pro forma adjustments.

Speaker Change: To date, there has not been a noticeable impact from government efficiency efforts on our business.

Stephanie Goldman: Position of Sterling had occurred on January one 2023.

Speaker Change: While tariffs may impact our customers and overall economic growth, we do not have any significant direct exposure to tariffs and as a reminder, 87% of our 2020 for pro forma revenues were generated in the U S.

Stephanie Goldman: The pro forma information does not constitute article 11 pro forma information.

Speaker Change: I'm joined on our call today by Scott Peeples, Our Chief Executive Officer, and Stephen Murphy, Our Chief Financial Officer. After our prepared remarks, we will take your questions I will now hand, the call over to Scott.

Speaker Change: Turning to slide five and an updated view of our enhanced profile with the addition of Sterling.

Scott Peeples: Thank you Stephanie and good morning, everyone.

Speaker Change: Thank you for joining our call.

Speaker Change: Our combined capabilities position us as a leader and increase our customer value proposition.

Speaker Change: <unk> 24 was a big year for first advantage as we advance on our strategy and announced and closed on the Sterling acquisition.

Speaker Change: Offer it offering differentiated technology platforms, and a broad collection of innovative solutions across a comprehensive range of verticals.

Speaker Change: I'm very proud of our team's dedication to execution and consistently delivering results keeping our customers at the center of everything we do.

Speaker Change: As a reminder, with the closing of Sterling on October 30, <unk> our.

Speaker Change: I am also excited to provide an update on our fourth quarter and full year accomplishments and to discuss our outlook for 2025.

Speaker Change: <unk> fourth quarter and full year results include two months of Sterling performance.

Speaker Change: In order to provide comparability to previous periods, we are showing first advantage and sterling on a pro forma basis with combined financial data for 2023 and 2024 throughout this presentation.

Speaker Change: We have four key messages for today first we generated solid results for the fourth quarter and full year amid an uncertain macro environment. We also maintained our cost discipline to sustain robust margins within the legacy first advantage business and produce strong cash flow.

Speaker Change: And plan to continue to do so in the future.

Speaker Change: In 2024, we delivered sustained profitability, while managing through the Sterling closing and kicking off integration.

Speaker Change: Second as you know we closed on our $2 $2 billion strategic acquisition of Sterling.

Speaker Change: Our pro forma full year revenues were approximately $1 $5 billion with $397 million in pro forma adjusted EBITDA or $458 million on a synergize basis.

Speaker Change: This leads me to the third point that we are underway in rolling out our updated strategy, which we call <unk>.

Speaker Change: As we discussed last quarter, our organization and management team have been optimized to deliver growth.

Speaker Change: In 2024 are approximately 10000 team members completed nearly 190 million screens on behalf of our 80000 active customers across 200 countries and territories. This.

Speaker Change: With the additional scale and capabilities of Sterling and <unk> five that Oh, we are accelerating our strategic progress.

Speaker Change: Our key strategic objectives in 2025 are to action, our synergy targets deleverage our balance sheet successfully execute our integration plan and accelerate our go to market strategy focused on product technology and innovation.

Speaker Change: This includes over two thirds of fortune 100 companies and approximately one half of fortune 500 companies.

Our gross retention remains at approximately 96%.

Speaker Change: We now have over 900 million records in our proprietary databases and we have over 100 integrations with applicant tracking systems and human capital management partners, giving us a unique competitive advantage.

Speaker Change: For the fourth quarter and full year combined upsell cross sell and new logo rates performed in line or better than legacy first advantage and Sterling historical growth awkward algorithms.

Speaker Change: Over time, our synergy realization will help to stabilize and expand Sterling margins we.

Speaker Change: We are focused on deleveraging our balance sheet and have gotten a fast start on the sterling integration, while continuing to provide our customers with the service and quality. They know they can expect from us at.

Speaker Change: Retention rates also performed in line for both businesses.

Speaker Change: Together, we had 25 enterprise bookings in the fourth quarter and 88 in the last 12 months, each with $500000 or more of expected annual contract value, including two notably large U S deals.

Speaker Change: At the same time, we are maintaining our focus on innovation in order to position our business for future growth.

Speaker Change: And fourth.

Speaker Change: We are introducing our full year 2025 guidance, we are entering 2025 and a strong business position encouraged by recent pipeline success, reducing headwinds as recent jolts data continues to normalize and feedback from our customers.

Speaker Change: Looking into 2025, we have been seeing our pipeline momentum continue.

Speaker Change: We have recently won a large deal with a significant retail customer in the gig economy, we were able to leverage existing relationships and trust to unlock critical business issues drive the business to RFP and ultimately be awarded this deal.

Speaker Change: That said in view of the current macro environment, which continues to be uncertain, we are maintaining a cautiously optimistic outlook.

Speaker Change: Also in 2025, we won our largest international contract in the past years with a new logo in Australia.

Speaker Change: Steven will cover our guidance and key assumptions in greater detail in the financial section shortly.

Speaker Change: We remain confident in our strategy and are positioned to create long term shareholder value in 2025 and beyond.

Speaker Change: As you can see our sales engine continues to deliver consistent results.

Speaker Change: Additionally, our vertical go to market approach remains a differentiator and a key driver of our growth strategy.

Speaker Change: In view of the New U S Administration I also wanted to share a few comments on potential policy impacts on our business we.

Speaker Change: We offer deep subject matter expertise and our industry segments, and we use industry specific data to advise our customers on topics, such as leading practices and product optimization.

Speaker Change: We do not have meaningful direct exposure to federal government hiring and therefore do not expect to be directly impacted by efforts to streamline federal government spending.

Speaker Change: Our largest verticals are health care transportation and retail and e-commerce.

Speaker Change: While first advantage has historically been more oriented towards hourly workers within high volume hiring verticals Sterling brings a strong portfolio of verticals focused on salaried workers, resulting in our pro forma revenue mix being more equally weighted between the two.

Speaker Change: To date, there has not been a noticeable impact from government efficiency efforts on our business.

Speaker Change: Our balance across a diverse range of verticals and between hourly and thoroughly focused customers enables us to weather a variety of macroeconomic scenarios and makes us less dependent on any one sector or customer.

Speaker Change: Turning to slide five and an updated view of our enhanced profile with the addition of Sterling.

Speaker Change: On this slide we have provided an updated view of our verticals for 2024 on a pro forma basis. During the year, we grew our footprint in health care and transportation as both verticals, particularly health care prove themselves to be resilient through the macro and had strong upsell cross sell results.

Speaker Change: Our combined capabilities position us as a leader and increase our customer value proposition.

Speaker Change: Offer it offering differentiated technology platforms, and a broad collection of innovative solutions across a comprehensive range of verticals.

Speaker Change: Our other verticals changed only modestly from the prior year with some headwinds experienced in our retail and staffing verticals Steve.

Speaker Change: As a reminder, with the closing of Sterling on October 31.

Speaker Change: Our reported fourth quarter and full year results include two months of Sterling performance.

Speaker Change: Stephen will share more about the underlying dynamics shortly.

Stephen: Turning to slide six.

Stephen: Since closing we have been laser focused on executing our strategic post close priorities, enabling bi enabled by our integration playbook.

Stephen: These priorities are focused on continuity with our customers a smooth integration process synergies and deleveraging our balance sheet.

Speaker Change: And plan to continue to do so in the future.

Speaker Change: In 2024, we delivered sustained profitability, while managing through the Sterling closing and kicking off integration.

Stephen: We have seen early success and leveraging each legacy company's technology and processes, it's closing.

Speaker Change: Our pro forma full year revenues were approximately $1 $5 billion with $397 million in pro forma adjusted EBITDA or $458 million on a synergize basis.

Stephen: Fundamentally we are applying a best of breed approach on tech and product specs to meet the needs of our customers.

Stephen: For example, first advantage was recently awarded a large deal in the health care vertical and we determined that Sterling platform was actually best suited to this customer's requirements. So this is the tech platform. They will go on.

Speaker Change: In 2024 are approximately 10000 team members.

Speaker Change: <unk> nearly 190 million screens on behalf of our 80000 active customers across 200 countries and territories.

Stephen: This type of flexibility enhances our customer value proposition offering more options for our customers and the market.

Speaker Change: This includes over two thirds of fortune 100 companies and approximately one half of fortune 500 companies.

Stephen: We have also identified automation opportunities, where one company may have automated criminal court records in a jurisdiction that the other had not yet.

Speaker Change: Our gross retention remains at approximately 96%.

Stephen: <unk> us to simply turn on that service for all of our customers, creating synergy opportunities and expanding our combined capabilities.

Stephen: We are also very pleased that there have not been disruptions to customers throughout the integration process.

Stephen: Our executive team has communicated regularly with our large customer loss.

Stephen: Sure that they are excited.

Stephen: Okay.

Stephen: Yes.

Stephen: Alright.

Speaker Change: Retention rates also performed in line for both businesses together.

Stephen: Mystic.

Stephen: Yeah.

Stephen: Thank you.

Stephen: Okay.

Stephen: No problem.

Stephen: Yes.

Stephen: Okay.

Yes.

Stephen: Yes.

Stephen: [noise] [noise].

Speaker Change: Looking into 2025, we have been seeing our pipeline momentum continue we.

Stephen: Okay.

Stephen: Thought leadership and want to work with experts who understand their businesses.

Speaker Change: Also in 2025, we won our largest international contract in the past years with a new logo in Australia.

Stephen: <unk> are also intrigued to hear how we will leverage our large amounts of data and how the work we are doing to innovate within verifications will benefit them.

Speaker Change: As you can see our sales engine continues to deliver consistent results.

Stephen: We continue to drive innovation to maintain our competitive advantage and ensure we are offering the best solutions to our customers and we're doing all of this under our high performing culture.

Speaker Change: Additionally, our vertical go to market approach remains a differentiator and a key driver of our growth strategy.

Stephen: Our commitment to innovation supports our customers' priorities of speed cost and efficiency, we continue to integrate AI capabilities into our workflow, helping us increase our efficiency and provide greater coverage.

Speaker Change: Our largest verticals are healthcare transportation and retail and e-commerce.

Stephen: Thanks.

Stephen: Automating processes.

Stephen: Okay.

Stephen: Can you.

Stephen: Yeah.

Stephen: Okay.

Stephen: Yeah.

Stephen: [noise] competition.

Speaker Change: <unk> and our pro forma revenue mix being more equally weighted between the two.

Stephen: Okay.

Stephen: Right.

Stephen: Yeah.

Stephen:

Stephen: Okay.

Stephen: [noise] [noise] [noise] [noise] [noise].

Speaker Change: On this slide we have provided an updated view of our verticals for 2024 on a pro forma basis.

Speaker Change: During the year, we grew our footprint in health care and transportation as both verticals, particularly health care prove themselves to be resilient through the macro and had strong upsell cross sell results.

Stephen: [noise] program, we plan to focus on the consolidated business, particularly with the implementation of our <unk> strategy.

Stephen: Our fourth quarter pro forma revenues were $375 million of the year.

Speaker Change: Our other verticals changed only modestly from the prior year with some headwinds experienced in our retail and staffing verticals Steve.

Stephen: <unk>, 9% year over year.

Speaker Change: Stephen will share more about the underlying dynamics shortly.

Stephen: Our combined business continues to make year on year made headwind as hiring volumes continue to stabilize with base remaining negative on a year on year basis.

Stephen Murphy: Turning to slide six.

Stephen Murphy: Since closing we have been laser focused on executing our strategic post close priorities, enabling bi enabled by our integration playbook.

Stephen: This aligns with the trends in the Joe's and other data over the last number of quarters.

Stephen: And our legacy first advantage segment Americas segment revenues of $172 million were down by five.

Stephen Murphy: These priorities are focused on continuity with our customers a smooth integration process synergies and deleveraging our balance sheet.

Stephen: Okay.

Stephen: Yeah.

Stephen: [noise] [noise] [noise] [noise].

Stephen Murphy: We have seen early success in leveraging each legacy company's technology and processes, it's closing funding.

Stephen Murphy: Fundamentally we are applying a best of breed approach on tech and product specs to meet the needs of our customers.

Stephen Murphy: For example, first advantage was recently awarded a large deal in the health care vertical and we determined that Sterling platform was actually best suited to this customer's requirements. So this is the tech platform. They will go on.

Stephen: Yes.

Stephen: Going forward on a total company basis, we expect that our increased diversification within the broader Sterling base will help mitigate seasonality impacts on our business.

Stephen Murphy: This type of flexibility enhances our customer value proposition offering more options for our customers and the market.

Stephen: Our legacy first advantage International segment and continue to show Green shoots across all regions and performed better than we expected we anticipated with revenues, increasing eight 9% to $24 million on a constant currency basis legacy first advantage international revenues were up.

Stephen Murphy: We have also identified automation opportunities, where one company may have automated criminal court records in a jurisdiction that the other had not yet, allowing us to simply turn on that service for all of our customers, creating synergy opportunities and expanding our combined capabilities.

Stephen: 7.0% year over year.

Stephen: And our legacy Sterling segment pro forma revenues for Q4 were $181 million up 7% year over year with a 6% contribution from the <unk> acquisition.

Stephen Murphy: We are also very pleased that there have not been disruptions to customers throughout the integration process.

Stephen Murphy: Our executive team has communicated regularly with our large customers who have shared that they are excited to be able to benefit from the best of both worlds from first advantage and Sterling.

Stephen: Base trends in the legacy Sterling business largely performed in line with legacy first advantage in Americas.

Stephen Murphy: They are optimistic about our approach to integration and what it means for their background screening programs, including improved turnaround times, new products and services and enhanced platform functionality.

Stephen: Pro forma adjusted EBITDA for the fourth quarter was $100 million and our pro forma adjusted EBITDA margin was 26, 7% down approximately 300 basis points versus the prior year legacy first advantage and continue to drive margin of nearly 32%.

Stephen Murphy: They are eager to see new technology as it becomes available and experienced performance improvements from our combined capabilities.

Stephen: As we focus on maintaining our variable cost structure consistent with our historical approach despite debate and seasonal peak headwinds I previously mentioned.

Stephen Murphy: We're also getting strong traction with prospects, who are excited about our deeper global presence and our ability to leverage regional skills from both organizations. In addition, our increased vertical expertise is compelling for prospects, who are looking for thought leadership and want to work with experts who understand their businesses.

Stephen: Legacy Sterling continued to operate at a lower margin relative to legacy first advantage as a result of continued shifting mix to lower margin services.

Stephen: Lower margin from the <unk> acquisition and its historical operating methodology that resulted in a more fixed cost approach to fulfillment than legacy first advantage.

Stephen Murphy: Prospects are also intrigued to hear how we will leverage our large amounts of data and how the work we are doing to innovate within verifications will benefit them.

Stephen Murphy: We continue to drive innovation to maintain our competitive advantage and ensure we are offering the best solutions to our customers and we're doing all of this under our high performing culture.

Stephen: As part of our integration plans and we are working to adapt the legacy Sterling business to have a more variable cost structure.

Stephen: <unk> made historically.

Stephen: Perfect.

Stephen: Yes.

Stephen Murphy: Our commitment to innovation supports our customers' priorities of speed cost and efficiency.

Stephen: Fourth quarter, we also identified cost savings above and beyond our normal levers through head count management, even while diligently integrating sterling.

Stephen Murphy: We continue to integrate AI capabilities into our workflow, helping us increase our efficiency and provide greater customer service by.

Stephen: Turning to full year results on slide nine.

Stephen Murphy: By streamlining workflows and automating processes, we can leverage technology to meet business needs without increasing head count.

Stephen: Our overall annual performance was solid and closely in line with our combined company 2024 guidance ranges for our reported revenues adjusted EBITDA and adjusted net income and adjusted diluted EPS. This is further evidence that we continue to be diligent and successful at controlling what can be controlled within our business.

Stephen Murphy: Our combined technologies distinguish us from the competition and are a clear competitive advantage that enables us to expand our businesses by offering a unique customer experience.

Steven: And with that I will now turn the call over to Steven.

Stephen: Despite the uncertain macro environment and its impact on our base volumes.

Stephen Murphy: Thank you Scott and good morning, everyone.

Stephen Murphy: Today, I will provide color on our results and an update on our synergy progress and targets.

Stephen: Total pro forma revenues were $1 $5 billion up approximately 2% year over year.

Stephen Murphy: Walk you through our guidance for full year 2025.

Stephen: And our legacy first advantage America's segment for 2024 revenues of $659 million were down two 1% from the prior year.

Stephen Murphy: Start with our fourth quarter results on slide eight. Please note that as we continue to swiftly execute our integration program. We plan to focus on the consolidated business, particularly with the implementation of our <unk> strategy.

Stephen: And our legacy first advantage international segment revenues of $97 million were flat versus the prior year, but on a constant currency basis legacy first advantage international revenues were $96 million or 0.7 are down 0.7% year over year.

Stephen Murphy: Our fourth quarter pro forma revenues were $375 million.

Stephen Murphy: 0.9% year over year, our combined business continue to face year on year made headwinds as hiring volumes continue to stabilize with face remaining negative on a year on year basis.

Stephen: And total legacy first advantage revenues were down two 2%.

Stephen: And in our legacy Sterling segment pro forma revenues were $763 million up 6% year over year with six 9% growth from the bolt acquisition.

Stephen Murphy: This aligns with the trends in the Joe's and other data over the last number of quarters.

Stephen Murphy: And our legacy first advantage segment Americas segment revenues of $172 million were down five 5% from the prior year.

Stephen: Pro forma adjusted EBITDA for the year with $397 million.

Stephen: And our pro forma adjusted EBITDA margin was 26, 3% approximately 220 basis points lower year over year.

Stephen Murphy: These results were impacted by the uncertainty among Americans tumors during Q4, which affected our retail and transportation customers hiring levels.

Stephen: This decline as previously noted was driven by Sterling revenue mix towards lower margin products and the margin impact of the bolt acquisition.

Stephen Murphy: As such seasonal hiring revenues in Q4 were slightly weaker than expected and lasted for a notably shorter duration compared to prior year and our expectations.

Stephen: Turning to slide 10, we are showing a detailed adjusted diluted EPS bridge from full year 2023, the full year 2024, given all of the unique moving parts.

Stephen Murphy: Going forward on a total company basis, we expect that our increased diversification with the broader Sterling base will help mitigate seasonality impacts on our business.

Stephen: Our full year 2024, adjusted net income was $124 million adjusted diluted EPS was zero point of $1, 80% to 82%.

Stephen Murphy: Our legacy first advantage International segment continued to show Green shoots across all regions and performed better than we expected we anticipated with revenues, increasing eight 9% to $24 million on a constant currency basis legacy first advantage international revenues were up seven point.

Stephen: And our adjusted effective tax rate was 24, 9%.

Stephen: As noted when we gave our initial 2024 guidance last year 2024, adjusted diluted EPS growth was impacted by several of our historical capital allocation actions, including our 2023, a one time special dividend, our 2023 share repurchases and an exploration of favorable <unk>.

Stephen Murphy: Zero percent year over year.

Stephen Murphy: And our legacy Sterling segment pro forma revenues for Q4 were $181 million up 7% year over year with a 6% contribution from the <unk> acquisition.

Stephen: First rate swaps.

Stephen: Also as we noted during last quarter's call. The Sterling acquisition was not expected to provide immediate adjusted diluted EPS accretion as the Sterling results were initially more than offset by the incremental interest on the transaction financing and the impact of the share dilution from the issuance of the acquisition shares.

Stephen Murphy: Base trends in the legacy Sterling business largely performed in line with legacy first advantage in Americas.

Stephen Murphy: Pro forma adjusted EBITDA for the fourth quarter was $100 million and our pro forma adjusted EBITDA margin was 26, 7% down approximately 300 basis points versus the prior year legacy first advantage continue to drive margin of nearly 32%.

Stephen: All of these items.

Stephen: We're in line with our previous commentary overtime as we realized synergies we continue to anticipate delivering double digit adjusted diluted EPS accretion as mentioned in previous quarters.

Stephen Murphy: As we focus on maintaining our variable cost structure consistent with our historical approach despite debate and seasonal peak headwinds I previously mentioned.

Stephen: On Slide 11, you can see how we are making great progress on Actioning. Our synergy program. We previously communicated our goal of achieving $50 million to $70 million and run rate target synergies, which was updated from our original target.

Stephen Murphy: Legacy Sterling continued to operate at a lower margin relative to legacy first advantage as a result of continued shifting mix to lower margin services.

Stephen Murphy: Lower margin from the <unk> acquisition and its historical operating methodology that resulted in a more fixed cost approach to fulfillment than legacy first advantage.

Stephen: Yeah.

Stephen: Okay.

Stephen: Yeah.

Stephen: [noise] [noise] close.

Stephen Murphy: As part of our integration plans and we are working to adapt the legacy Sterling business to have a more variable cost structure.

Stephen: When we presented last quarter, we highlighted $10 million of synergies already action and we finished 2024 at approximately $20 million of it.

Stephen Murphy: <unk> made historical model for fulfillment workforce management.

Stephen: $20 million actions, representing substantial progress towards our synergy goals, our dedicated integration management function led by product and operations leaders are driving the execution of our plans.

Stephen Murphy: During the fourth quarter, we also identified cost savings above and beyond our normal levers through head count management, even while diligently integrating sterling.

Speaker Change: Turning to full year results on slide nine.

Stephen: As we have been as we have been actioning synergies and our integration plan, we have uncovered additional opportunities for cost savings, giving us confidence to raise the lower end of our target range today.

Speaker Change: Our overall annual performance was solid and closely in line with our combined company 2024 guidance ranges for our reported revenues adjusted EBITDA and adjusted net income and adjusted diluted EPS.

Stephen: Our current focus has been on reducing duplicative costs in our corporate and internal functions and reducing certain redundancies in our fulfillment and commercial department and we have been able to action. These savings more quickly than previously expected.

Speaker Change: Further evidence that we continue to be diligent and successful at controlling what can be controlled within our business. Despite the uncertain macro environment and its impact on our base volumes.

Stephen: As a result, we now expect to action, 50% plus of our target synergies within the first six months post closing a meaningful acceleration from our previous objective.

Speaker Change: Total pro forma revenues were $1 $5 billion up approximately 2% year over year.

Speaker Change: And our legacy first advantage America's segment for 2024 revenues of $659 million were down two 1% from the prior year and our legacy first advantage International segment revenues of $97 million were flat versus the prior year, but on a constant currency basis Leggett.

Stephen: Achieving the same goal within the first year.

Stephen: On slide 12, we are showing key growth metrics for legacy first advantage and legacy Sterling.

Stephen: Over time in both businesses have consistently delivered a strong historical performance for upsell and cross sell new customer logos and attrition demonstrating our ability to deliver on what we can control with the variation being driven by base.

Speaker Change: He first advantage international revenues were $96 million or 0.7 are down 0.7% year over year.

Speaker Change: And total legacy first advantage revenues were down two 2%.

Stephen: This has been true throughout 2024, including the fourth quarter and we have been pleased that both businesses combined upsell cross sell and new logo performance as well as retention have broadly aligned with historical revenue growth rates.

Speaker Change: And then our legacy Sterling segment pro forma revenues were $763 million up 6% year over year with six 9% growth from the bolt acquisition.

Speaker Change: Pro forma adjusted EBITDA for the year with $397 million.

Stephen: This was propelled by our go to market momentum throughout the year and ending the year with a strong pipeline and gross retention remained healthy and stable.

Speaker Change: And our pro forma adjusted EBITDA margin was 26, 3% approximately 220 basis points lower year over year.

Stephen: In the fourth quarter basis based revenues continue to be a headwind with legacy first advantage impacted by weaker than expected Q4 seasonal hiring as the softer hiring peak ended normal or in an earlier than normal in mid November.

Speaker Change: This decline as previously noted was driven by Sterling revenue mix towards lower margin products and the margin impact of the bolt acquisition.

Speaker Change: Turning to slide 10, we are showing a detailed adjusted diluted EPS bridge from full year 2023, the full year 2024, given all of the unique moving parts.

Stephen: Legacy Sterling saw parallel headwind as similarly, Q4 base softness was seen in legacy Sterling Americas business.

Speaker Change: Our full year 2024, adjusted net income was $124 million adjusted diluted EPS was 0.1 dollars 80 to 82.

Stephen: <unk> grown at legacy Sterling has lag legacy first advantages at legacy Sterling vertical had been more impacted by the normalization of hiring patterns.

Stephen: We believe that when the macro environment stabilizes, our base growth will normalize towards our historical rates.

Speaker Change: And our adjusted effective tax rate was 24, 9%.

Speaker Change: As noted when we gave our initial 2024 guidance last year 2024, adjusted diluted EPS growth was impacted by several of our historical capital allocation actions, including our 2023, a one time special dividend, our 2023 share repurchases.

Stephen: Now turning to cash flow and net leverage on slide 13.

Stephen: Last 12 months, we generated adjusted operating cash flows of $165 million, a 1% increase on a year over year basis. As we continue to closely manage our working capital and focus on cash flow conversion with our DSO is remaining in check.

Speaker Change: And in exploration a favorable interest rate swaps.

Also as we noted during last quarter's call. The Sterling acquisition was not expected to provide immediate adjusted diluted EPS accretion as the Sterling results were initially more than offset by the incremental interest on the transaction financing and the impact of the share dilution from the issuance of the acquisition shares.

Stephen: Our cash balance at December 31 in 2024 was $169 million, finishing above our desired minimum cash level of $115 million.

Stephen: During the quarter, we used $10 million for purchases of property and equipment and capitalized software development costs.

Speaker Change: <unk>.

All of these items.

Stephen: This was $32 million for the full year.

Speaker Change: We're in line with our previous commentary over time as we realize synergies we continue to anticipate delivering double digit adjusted diluted EPS accretion as mentioned in previous quarters.

Stephen: Our synergize pro forma adjusted EBITDA net leverage ratio at year end was four four times we.

Stephen: We remain committed to our goal of reducing net leverage towards approximately three times synergize and pro forma adjusted EBITDA within 24 months post close and to our long term net leverage target of two to three times.

Speaker Change: On Slide 11, you can see how we are making great progress on Actioning. Our synergy program. We previously communicated our goal of achieving 50% to $70 million and run rate target synergies, which was updated from our original target of $50 million plus.

Stephen: Moving to slide 14, and our 2025 guidance I'll start by noting that all year over year comparisons are on a pro forma basis to allow for easier comparability.

Today, we are again updating our target range to $60 million to $70 million of expected synergies to be action within two years of close.

Stephen: We expect 2025 total revenues in the range of one five to $1 6 billion.

Speaker Change: When we presented last quarter, we highlighted $10 million of synergies already action and we finished 2024 at approximately $20 million of it.

Stephen: Adjusted EBITDA of $410 million to $450 million and adjusted diluted EPS of <unk> 86 to $1 <unk>.

Speaker Change: $20 million action, representing substantial progress towards our synergy goals, our dedicated integration management function led by product and operations leaders are driving the execution of our plans.

Stephen: Yes.

Stephen: For revenue this range represents flat to a little over 5% year over year pro forma growth.

Stephen: At our guidance midpoint, we expect to expand full year adjusted EBITDA margins by approximately 150 basis points.

As we have been as we have been actioning synergies and our integration plan, we have uncovered additional opportunities for cost savings, giving us confidence to raise the lower end of our target range today.

Stephen: Also factored into our 2025 guidance, our current assumptions related to the sustained mix shifts within our business primarily within the early excitement when you do impact adjusted EBITDA margins.

Speaker Change: Our current focus has been on reducing duplicative costs in our corporate and internal functions and reducing certain redundancies in our fulfillment and commercial department and we have been able to action. These savings more quickly than previously expected.

Stephen: Our guidance reflects 2025 and year realized synergies in the range of $25 million to $30 million with our focus being to accelerate our savings wherever possible.

Speaker Change: As a result, we now expect to action, 50% plus of our target synergies within the first six months post closing a meaningful acceleration from our previous objective.

Stephen: Our guidance also includes our latest view on the macro environment and labor market.

Stephen: While labor market broadly it looks to be more stable entering 2025, we have not yet seen a return of investment hiring in our verticals.

Speaker Change: Achieving the same goal within the first year.

Speaker Change: On slide 12, we are showing key growth metrics for legacy first advantage and legacy Sterling.

As such our guidance reflects a prudent posture towards growth in 2025, particularly in the first half of the year.

Over time in both businesses have have consistently delivered a strong historical performance for upsell and cross sell new customer logos and attrition demonstrating our ability to manage and deliver on what we can control with the variation being driven by base.

Stephen: Looking at our growth algorithm in more detail, we do not expect to fully lap prior year base decline until the middle of 2025.

Stephen: Therefore, our guidance is based on the expectation that base will remain a growth headwind through the middle of the year, improving sequentially and turning to neutral and then slightly positive later in the year.

Speaker Change: This has been true throughout 2024, including the fourth quarter and we have been pleased that both businesses combined upsell cross sell and new logo performance as well as retention have broadly aligned with historical revenue growth rates.

Stephen: More assembly, we are modeling slight to modest full year base revenue declines across our entire guidance range.

Speaker Change: This was propelled by our go to market momentum throughout the year and ending the year with a strong pipeline and gross retention remained healthy and stable.

Stephen: With that said, we do expect the continued productivity of upsell and cross sell and new logo growth consistent with historical trends.

Speaker Change: In the fourth quarter based base revenues continue to be a headwind with legacy first advantage impacted by weaker than expected Q4 seasonal hiring as the softer hiring peak ended normal or ended earlier than normal in mid November.

Stephen: We also expect customer retention to remain in line with our strong historical performance of around 96% to 97% even as we continue to integrate in the Sterling acquisition.

Stephen: While recently FX has not been a big headwind for our business recent strengthening of the U S. Dollar has led to an expectation that FX will have a slightly larger impact on our business in 2025, an important factor as we have seen our international markets stabilized and returned to growth.

Speaker Change: Legacy Sterling saw parallel headwind as similarly, Q4 base softness was seen in legacy Sterling Americas business.

Speaker Change: This growth at legacy Sterling has lagged legacy first advantages at legacy Sterling vertical have been more impacted by the normalization of hiring patterns we.

Stephen: Let me now.

Stephen: Okay.

Stephen: Yes.

Speaker Change: We believe that when the macro environment stabilizes, our base growth will normalize towards our historical rates.

Stephen: [noise] [noise] at the first three quarters of 2025, when the fourth quarter more on par with the third.

Speaker Change: Now turning to cash flow and net leverage on slide 13.

Speaker Change: Over the last 12 months, we generated adjusted operating cash flows of $165 million, a 1% increase on a year over year basis. As we continue to closely manage our working capital and focus on cash flow conversion with our DSO is remaining in check.

Stephen: This change in anticipated sequential seasonal growth dynamics as a result of our Sterling acquisition.

Stephen: Versification of vertical exposure and how that projects over the years.

Speaker Change: Our cash balance at December 31, 2024 was $169 million, finishing above our desired minimum cash level of $150 million.

Stephen: We expect our Q1 adjusted EBITDA margin to be in the mid 20 threes to mid 24% range, which reflects the blended impact of legacy first advantage margin historically in the high <unk> and legacy Sterling Martin.

Speaker Change: During the quarter, we used $10 million for purchases of property and equipment and capitalized software development costs.

Stephen: Okay.

Speaker Change: This was $32 million for the full year.

Stephen: Okay.

Speaker Change: Our synergize pro forma adjusted EBITDA net leverage ratio at year end was four four times.

Stephen: Okay.

Stephen: [noise] sequential adjusted EBITDA margin expansion during the year.

We remain committed to our goal of reducing net leverage towards approximately three times synergize pro forma adjusted EBITDA within 24 months post close and to our long term net leverage target of two to three times.

Stephen: Starting with Q2, we expect adjusted EBITDA margins to be above 28%.

Stephen: Overall, we believe that we are extremely well positioned to benefit when the macro environment improves.

Stephen: We expect Q1 adjusted diluted EPS to be between 12 and 15 cents.

Speaker Change: Moving to slide 14, and our 2025 guidance.

Speaker Change: I'll start by noting that all year over year comparisons are on a pro forma basis to allow for easier comparability.

Due to the seasonality I, just mentioned and the impact of the full $2 2 billion acquisition financing.

Speaker Change: We expect 2025 total revenues in the range of one five to $1 6 billion.

Stephen: After Q1, we expect considerable adjusted diluted EPS improvement as revenue ramps, we recognize that this guidance implies a meaningful improvement during the year, which is primarily driven by the impacts of the Sterling acquisition, and our new seasonality and to a much lesser extent.

Speaker Change: Adjusted EBITDA of $410 million to $450 million and adjusted diluted EPS of <unk> 86 to $1 <unk>.

Speaker Change: For revenue this range represents flat to a little over 5% year over year pro forma growth.

Stephen: The evolution of our expected macro stabilization.

Speaker Change: At our guidance midpoint, we expect to expand full year adjusted EBITDA margins by approximately 150 basis points.

Stephen: We expect our adjusted diluted EPS to range between the mid to low 20% to 30% or <unk> 30 per share for each of the last three quarters.

Speaker Change: Also factored into our 2025 guidance, our current assumptions related to the sustained mix shifts within our business, primarily within the Sterling segment, which do impact adjusted EBITDA margins.

Stephen: We have also provided a summary of selected 2025 modeling.

Stephen: In the presentation appendix.

Stephen: Moving to slide 15, we have provided an adjusted diluted EPS bridge, which illustrates the puts and takes from our 2024 adjustment adjusted diluted EPS to our 2025 guidance I just mentioned.

Speaker Change: Our guidance reflects 2025 and year realized synergies in the range of $25 million to $30 million with our focus being to accelerate our savings wherever possible.

Speaker Change: Our guidance also includes our latest view on the macro environment and labor market while.

Stephen: This is very important to understand as the sterling financing and share issuance have 10 months of year over year impact in 2025.

Speaker Change: While labor market broadly it looks to be more stable entering 2025, we have not yet seen a return of investment hiring in our verticals.

Stephen: Even in our projected neutral macro environment.

Stephen: And after adjusting for the Sterling acquisition items expected synergy realization in 2025 growth and investment we expect 2025 adjusted diluted EPS expansion of over 15% at the midpoint.

Speaker Change: As such our guidance reflects a prudent posture towards growth in 2025, particularly in the first half of the year.

Speaker Change: Looking at our growth algorithm in more detail, we do not expect fully lap prior year base decline until the middle of 2025.

Stephen: This sets us up well to continue expanding and adjusted diluted EPS in the coming years, which is aligned to our previous messaging.

Speaker Change: Therefore, our guidance is based on the expectation that base will remain a growth headwind through the middle of the year, improving sequentially and turning to neutral and then slightly positive later in the year.

Stephen: With that let me turn it back to Scott for closing remarks before we open the line for questions.

Scott: Thank you Steven.

Scott: Moving to slide 17, and a few closing comments.

Speaker Change: More assembly, we are modeling slight to modest full year base revenue declines across our entire guidance range.

Scott: We are excited to be hosting our inaugural Investor day on May 28.

Scott: At that event, we plan to share more about our F. A five dato strategy an update on our integration program as well as long term targets that will guide our business over the coming years.

Speaker Change: With that said, we do expect the continued productivity of upsell and cross sell and new logo growth consistent with historical trends.

Speaker Change: We also expect customer retention to remain in line with our strong historical performance of around 96% to 97% even as we continue to integrate the Sterling acquisition.

Scott: You will be able to participate look for more information coming soon.

Scott: Second I would like to emphasize our consistent focus at first advantage, we continue to deliver solid results and execute on priorities. We remain focused on delivering on our value creation playbook and shaping the future of our company to better serve our customers with that we will open the line for questions.

Speaker Change: While recently FX has not been a big headwind for our business recent strengthening of the U S. Dollar has led to an expectation that FX will have a slightly larger impact on our business in 2025, an important factor as we have seen our international markets stabilize and return to growth.

Scott: Thank you we will now begin the question and answer session. At this time. If you have a question. Please press the star and one on your telephone keypad. If at any point. Your question has been answered you may remove yourself from the question queue by pressing star and two if you are using.

Speaker Change: Looking now at the quarterly phasing of our 2025 guidance.

Speaker Change: We expect Q1, a year over year revenues to decline by approximately 1% to 4%.

Speaker Change: And expect quarterly year over year revenue growth to sequentially improve for the first three quarters of 2025 with the fourth quarter more on par with the third.

Scott: Speaker phone, we request you pick up your handset.

Scott: Optimal sound quality.

Speaker Change: This change in anticipated sequential and seasonal growth dynamics as a result of our Sterling acquisition, the diversification of vertical exposure and how that projects over the years.

Speaker Change: We'll take our first question from Shlomo Rosenbaum with Stifel. Please go ahead. Your line is open.

Shlomo Rosenbaum: Hi, Good morning, and thank you for taking my questions could you provide a little bit more detail about some of the weakness in seasonal hiring in retail and transportation just a little bit more of color on what your clients were telling you about why it happened the duration and is this something that you're.

Speaker Change: We expect our Q1 adjusted EBITDA margin to be in the mid 20 threes to mid 24% range, which reflects the blended impact of legacy first advantage margin historically in the high <unk> and legacy Sterling margins, which have been closer to 20% during the first quarter as seasonal revenues have.

Shlomo Rosenbaum: Is this translating into other areas at all through the <unk>.

Shlomo Rosenbaum: First quarter of the year or you know and then I'd like to ask you a follow up.

Speaker Change: Yet to ramp.

Speaker Change: Additionally, our pace of synergy realization is expected to drive additional sequential adjusted EBITDA margin expansion during the year.

Yes, I think I think it's a great point because this this let's call it a trend.

Speaker Change: Starting with Q2, we expect adjusted EBITDA margins to be above 28%.

Shlomo Rosenbaum: Now happened for the last couple of years, where we're basically seeing is less of that of the peaks and the valleys and a little bit just more a more normalization as we go into the seasonal hiring period and what we've seen over the last couple of years is that hiring.

Speaker Change: Overall, we believe that we are extremely well positioned to benefit when the macro environment improves.

Speaker Change: We expect Q1 adjusted diluted EPS to be between 12, and 15 cents due to the seasonality I just mentioned and the impact of the full $2 2 billion acquisition financing.

Shlomo Rosenbaum: It's starting to slow down around mid November.

Shlomo Rosenbaum: And continues all the way through the month of December.

After Q1, we expect considerable adjusted diluted EPS improvement as revenue ramps.

Shlomo Rosenbaum: But then picks back up in January as it or back onto a normal course, so for the last couple of years. What we've seen is fairly slow half of November most of December but no impact going into Q1 as hiring been continues to ramp back up.

Speaker Change: We recognize that this guidance implies a meaningful improvement during the year, which is primarily driven by the impact of the Sterling acquisition, and our new seasonality and to a much lesser extent the evolution of our expected macro stabilization.

Shlomo Rosenbaum: So we have factored that into our 2025 guidance that we expect something similar again later this year.

Speaker Change: We expect our adjusted diluted EPS to range between the mid to low 20% to 30% or <unk> 30 per share for each of the last three quarters.

Shlomo Rosenbaum: So that is definitely factored into our guidance.

Shlomo Rosenbaum: Okay. Thanks, and then.

Speaker Change: We have also provided a summary of selected 2025 modeling assumptions in the presentation appendix.

Shlomo Rosenbaum: Just.

Shlomo Rosenbaum: Comment that you made about the big win.

Shlomo Rosenbaum: In the healthcare space using the Sterling.

Speaker Change: Moving to slide 15, we have provided an adjusted diluted EPS bridge, which illustrates the puts and takes from our 2024 adjusted adjusted diluted EPS to our 2025 guidance I just mentioned.

Shlomo Rosenbaum: Platform I think what we discussed in the past was.

Shlomo Rosenbaum: The thought that you would move clients or incremental clients would be on the first advantage platform, but using kind of destroying front end.

Speaker Change: This is very important to understand as the sterling financing and share issuance have 10 months of year over year impact in 2025.

Shlomo Rosenbaum: And I guess the question I've got is that it's great to win with the strong platform.

Shlomo Rosenbaum: That mean that you're gonna indefinitely be supporting really the backend of Sterling for for a long period of time.

Speaker Change: Even in our projected neutral macro environment.

Speaker Change: And after adjusting for the Sterling acquisition items expected synergy realization in 2025 growth and investment, we expect 2025 and adjusted diluted EPS expansion of over 15% at the midpoint.

Shlomo Rosenbaum: Yes, so I'm I got to give a huge shout out to our product and tech teams for coming up with some great innovative ideas here.

Speaker Change: <unk> goal of this integration with Sterling was.

No disruption to customers.

Speaker Change: This sets us up well to continue expanding and adjusted diluted EPS in the coming years, which is aligned to our previous messaging.

Speaker Change: And I think you could see that in our.

Speaker Change: Retention numbers that we've that we've put out.

Speaker Change: With that let me turn it back to Scott for closing remarks before we open the line for questions.

Speaker Change: Our retention has been in line with normal so we're not seeing any client disruption as part of this acquisition and that's primarily because of the technology and product vision that our teams have created so they have it.

Scott Peeples: Thank you Steven.

Scott Peeples: Moving to slide 17, and a few closing comments.

Scott Peeples: We are excited to be hosting our inaugural Investor day on May 28.

Scott Peeples: At that event, we plan to share more about our Fas five dato strategy, an update on our integration program as well as long term targets that will guide our business over the coming years I Hope you will be able to participate.

Speaker Change: It's a very complicated in depth thing, but I'll give you a high level here they have come up with a very innovative way for customers to leverage the best of both worlds from both platforms.

Speaker Change: Regardless of where they are around the world.

For more information coming soon.

Scott Peeples: Second I would like to emphasize our consistent focus at first advantage, we continue to deliver solid results and execute on priorities. We remain focused on delivering on our value creation playbook and shaping the future of our company to better serve our customers.

And essentially.

Speaker Change: The technology solutions that we're gonna be creating will allow us to tap in to both platforms.

Speaker Change: And the best the best in breed approach from both platforms without the clients having to do any migrations. So consider this as a series of upgrades.

Scott Peeples: With that we will open the line for questions.

Speaker Change: Thank you we will now begin the question and answer session. At this time. If you have a question. Please press the star and one on your telephone keypad. If at any point. Your question has been answered you may remove yourself from the question queue by pressing star and two if you are using a <unk>.

Speaker Change: And yes that does mean, we have to maintain both platforms, but not in the same way they're being maintained today. So we can.

Speaker Change: <unk>.

Speaker Change: Reduce.

Speaker Change: Our head count in overheads in supporting of the platforms by because of the solution that that team has come up with so that'll continue to drive our synergies with no impact to our original plan there, but we just think this is going to be a great experience for clients and corporate clients candidates.

Speaker Change: Speaker phone, we request is pick up your handset to provide optimal sound quality.

Speaker Change: We will take our first question from Shlomo Rosenbaum with Stifel. Please go ahead. Your line is open.

Speaker Change: Hi, Good morning, and thank you for taking my questions could you provide a little bit more detail about some of the weakness in seasonal hiring in retail and transportation just a little bit more of color on what your clients were telling you about why it happened the duration and is this something that you are.

Speaker Change: Thank you.

Speaker Change: We'll take our next question from Andrew Steinman with J P. Morgan. Please go ahead. Your line is open.

Andrew Steinman: Hi, I definitely heard your comments, how flexible client approach and coach merger I was wondering if you're tracking a net promoter score.

Speaker Change: Is this translating into other areas at all through the.

Andrew Steinman: And to get out, particularly kind of pre merger post merger, so that we could keep our.

The first quarter of the year, and then I'd like to ask you a follow up.

Andrew Steinman: And I on that and and also if you could go.

Speaker Change: Yes, I think I think it's a great point because this.

Andrew Steinman: Go back to talk about your verified database now that you know that you have you know kind of sterling's.

Speaker Change: This let's call it a trend.

Speaker Change: Has now happened for the last couple of years, where we're basically seeing is less of that of the peaks and valleys in a little bit more of a more normalization as we go into the seasonal hiring period and what we've seen over the last couple of years is that.

Andrew Steinman: Information in that database could you talk about how much you know revenues or savings.

Andrew Steinman: Database is producing.

Andrew Steinman: Yeah, and Andrew we we will continue in first advantage has always been a big believer in.

Andrew Steinman: And net promoter scores on not just our.

Speaker Change: It's starting to slow down around mid November.

Andrew Steinman: Customers, but also their their candidates experience. So we continue to measure that both.

Speaker Change: And continues all the way through the month of December.

Andrew Steinman: Both candidate experience.

Speaker Change: Let's then picks back up in January as if for back onto the normal course.

Andrew Steinman: We measure the the Onboarding experience of new logos, and we measure the ongoing net promoter scores.

Speaker Change: For the last couple of years, what we've seen is fairly slow half. The November most of December but no impact going into Q1 as hiring been continues to ramp back up. So we have factored that into our 2025 guidance that we expect something similar again later this year.

Andrew Steinman: And I think we've taken it a step further.

Andrew Steinman: Cause of the acquisition that we are actively.

Andrew Steinman: Actively in front of especially the Sterling customer base on a on a regular basis, you know more than usual just to make sure. We're hearing all of their needs and concerns and addressing things that and I will tell you. They are extremely excited about this acquisition.

Speaker Change: So that is definitely factored into our guidance.

Speaker Change: Yeah.

Speaker Change: Okay. Thanks, and then.

Speaker Change: Just the comment that you made about the big win.

Because they are now going to be able to tap into the best of breed stuff from first advantage, which is you know kind of what I was talking about with Shlomo question.

Speaker Change: In the health care space using the Sterling.

Platform I think what we discussed in the past was.

Speaker Change: The thought that you would move clients or incremental clients would be on the first advantage platform, but using kind of a destroying front end.

Andrew Steinman: So customers are definitely anticipating getting.

Andrew Steinman: The you know the great products and service from from first advantage on the Sterling platform. So they're going to get the best of both worlds, which is going to be a great situation for us. So that's where we're pretty bullish on our retention numbers and our client satisfaction numbers.

Speaker Change: And I guess the question I've got is that it's great to win with the strong platform does that mean that youre going to definitely be supporting really the backend of sterling for for a long period of time.

Speaker Change: Yes, so I'm I got to give a huge shout out to our product and tech teams for coming up with some great innovative ideas here.

Andrew Steinman: On the database on the verified side you heard in my prepared remarks that.

Andrew Steinman: Our proprietary database records are now up to 900 million.

Speaker Change: The whole goal of this integration with Sterling was.

Andrew Steinman: Breakdown of that is that verified is now up to $120 million.

Speaker Change: No disruption to customers.

Speaker Change: And I think you could see that in our.

Andrew Steinman: And our national criminal databases 700.

Speaker Change: Retention numbers that we've that we've put out.

Andrew Steinman: 80.

Speaker Change: Our retention has been in line with normal. So we are not seeing any client disruption as part of this acquisition and that's primarily because of the technology and product vision that our teams have created so they have.

Andrew Steinman: Interesting.

Andrew Steinman: About that number is that none of that increase includes the sterling data yet.

Andrew Steinman: We have not and we have not tapped into that yet.

Andrew Steinman: Teams working on it but we haven't used that we haven't tapped the sterling data into that database is the the database increases are because of new third party data provider partnerships that we've formed across multiple areas.

Speaker Change: It's a very complicated in depth thing, but I'll give you a high level they have come up with a very innovative way for customers to leverage the best of both worlds from both platforms.

Andrew Steinman: And that's allowed us to increase the size of the database, but ultimately we also will be adding the sterling data.

Speaker Change: Regardless of where they are around the world.

Speaker Change: And essentially.

Andrew Steinman: To this but we just that will probably be a later in the year.

Speaker Change: The technology solutions that we're gonna be creating will allow us to tap in to both platforms.

Andrew Steinman: Project, because it takes a long time to clean.

Andrew Steinman: Clean and format and move over data, but that's what the teams are working on.

Speaker Change: The best the best in breed approach from both platforms without the clients having to do any migrations. So consider this as a series of upgrades.

Andrew Steinman: Thank you.

Speaker Change: We'll take our next question from Andrew Nicholas with William Blair. Please go ahead. Your line is open.

And yes that does mean, we have to maintain both platforms, but not in the same way they're being maintained today. So we can.

Daniel medical: Hey, guys. This is Daniel medical on for Andrew today.

Speaker Change: Appreciate all the.

Speaker Change: Commentary on guidance.

Speaker Change: Effectively reduce.

Speaker Change: So everything maybe.

Our head count in overheads in supporting of the platforms by because of the solution in the test team has come up with so that will.

Speaker Change: On the on the top line range.

Speaker Change: Do you feel that the low end of the guide embed.

Speaker Change: To drive our synergies with no impact to our original plan there, but we just think this is going to be a great experience for clients and corporate clients candidates.

Speaker Change: Some leeway for for a slower than expected recovery in base growth. It seems like a fairly quick.

Speaker Change: Recovery, that's being embedded from.

Speaker Change: Okay.

Speaker Change: From the lower than expected Q4 to the breakeven point.

Speaker Change: We'll take our next question from.

Speaker Change: Andrew Steinman with J P. Morgan. Please go ahead your line is open.

Speaker Change: So maybe your thoughts there.

Daniel medical: Yeah, Daniel a couple things to keep in mind.

Speaker Change: Hi, I definitely heard your comments, how flexible the client approach and post merger I was wondering if you're tracking a net promoter score.

Speaker Change: A as I mentioned in the remarks across all ranges of our guidance, we still expect to be negative for the year.

Speaker Change: And when you really start to break that down and sequentially. It is a little bit more front weighted to your point, but.

Speaker Change: And to get out, particularly kind of pre merger post merger, so that we could keep.

And an eye on that and also if you could go.

Speaker Change: If you've been following first advantage and Sterling is long enough. Our base decline you really started Q3 of 2022. So this is kind of a three year evolution cycle.

Speaker Change: Go back to talk about your verified database now that you know that you have kind of sterling.

Speaker Change: Information in that database could you talk about how much revenues or savings.

Speaker Change: We start to have that.

Speaker Change: Steady comps when we get to the back half of the year that have those three years compound database declines in them already.

Speaker Change: Database is producing.

Andrew Steinman: Yeah and Andrew.

Speaker Change: And then when you also look at the macro data and just kind of a stabilization cycle, that's been going on the pace of change and the hiring trend.

Speaker Change: We'll continue first advantage has always been a big believer in you know in.

Andrew Steinman: And net promoter scores on not just our.

Andrew Steinman: Customers, but also their candidates experience. So we continue to measure that.

Speaker Change: As planned out a lot so when we looked at our guidance and our budget in our modeling for 2025.

Andrew Steinman: Both candidate experience.

Andrew Steinman: Measure the the Onboarding experience of new logos, and we measure the ongoing net promoter scores.

Speaker Change: Okay.

Speaker Change: Right.

Speaker Change: Yeah.

Speaker Change: Right.

Andrew Steinman: And I think we've taken it a step further because of the acquisition debt.

Speaker Change: [noise] Jackson.

Speaker Change: Trying to keep the only one but for the middle of the year you have those compounding comps.

Andrew Steinman: We are actively.

Andrew Steinman: Actively in front of especially the Sterling customer base on a on a regular basis more than usual just to make sure. We're hearing all of their needs and concerns and addressing things that Mike and I will tell you. They are extremely excited about this acquisition.

Speaker Change: The prior years.

Speaker Change: And then as I mentioned earlier.

Speaker Change: And then like Scott mentioned, we've got great productivity on our pipeline new logo upsell cross sell those are triggering that they always have.

Speaker Change: Client bases than our combined client base and as Scott just mentioned a few minutes ago. We're laser focused on retention in those 90, 697% retention levels are now our norm.

Andrew Steinman: Because they are now going to be able to tap into the best of breed stuff from first advantage, which is kind of what I was talking about with Shlomo question.

Speaker Change: And then Oh.

Speaker Change: I had a few things.

Speaker Change: We're entering 2025 and a very strong shape.

Andrew Steinman: So customers are definitely anticipating getting.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: Thank you Sachin.

Andrew Steinman: The the great products and service from from first advantage on the Sterling platform. So they're going to get the best of both worlds, which is going to be a great situation. So that's where we're pretty bullish on our retention numbers and our client satisfaction numbers.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Right.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Thank you <unk>.

Speaker Change: On the database on the verified side you heard in my prepared remarks that.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: All right.

Speaker Change: Okay.

Speaker Change: Our proprietary database records are now up to 900 million.

Speaker Change: Alright.

Speaker Change: Okay.

Speaker Change: Breakdown of that is that verified is now up to $120 million.

Speaker Change: Okay, that's fine.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: And our national criminal databases 700.

Speaker Change: Okay.

Speaker Change:

Speaker Change: And.

Speaker Change: 80.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Interesting.

Speaker Change: About that number is that none of that increase includes the sterling data yet.

Speaker Change: Uh huh.

Speaker Change: Yes.

Speaker Change: Thanks.

Speaker Change: We have not and we have not tapped into that yet.

Speaker Change: You mentioned.

Speaker Change: Exactly.

Speaker Change: Teams working on it but we haven't used that we haven't tapped the Stewart Sterling data into that database is the the database increases are because of new third party data provider partnerships that we've formed across multiple areas.

Speaker Change: Okay.

Speaker Change: [noise] talked about.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: Have a potential to be.

Speaker Change: And that's allowed us to increase the size of the database, but ultimately we also will be adding the sterling data.

Speaker Change: Okay.

Speaker Change: Got it.

Speaker Change: Probably not.

Speaker Change: To this but we just that'll probably be a later in the year.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Project, because it takes a long time to.

Speaker Change: Okay.

Speaker Change: Clean and format and move over data, but that's what the teams are working on.

Speaker Change: Yes.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Great. Thank you.

Speaker Change: Thank you.

Speaker Change: Potentially.

Speaker Change: We'll take our next question from Andrew Nicholas with William Blair. Please go ahead. Your line is open.

Speaker Change: Okay.

Speaker Change: Yep.

Speaker Change:

Speaker Change: That's right.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Hey, guys. This is Daniel <unk> on for Andrew today.

Speaker Change: Okay.

Speaker Change: Appreciate all the.

Speaker Change: Commentary on guidance and cadence of everything maybe.

Speaker Change: Got it.

Speaker Change: On the on the top line range.

Speaker Change: Do you feel that the low end of the guide in bed.

Speaker Change: Some leeway for for a slower than expected recovery in base growth. It seems like a fairly quick.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: Yeah.

Speaker Change: Coverage, that's being embedded.

Speaker Change: Yeah.

Speaker Change: From the lower than expected Q4 to the breakeven point in the <unk>.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Got it.

Speaker Change: So maybe your thoughts there.

Speaker Change: That's fine.

Speaker Change: Okay.

Speaker Change: Daniel a couple things to keep in mind.

Speaker Change: Gotcha.

Speaker Change: Okay.

Speaker Change: A as I mentioned in the remarks across all ranges of our guidance, we still expect to be negative for the year.

Speaker Change: Yeah.

Speaker Change: Our strategy in that.

Speaker Change: And when you really start to break that down and sequentially. It is a little bit more front weighted to your point, but if you've been following first advantage and sterling long enough. Our babies declines really started Q3 of 2022. So this is kind of a three year evolution cycle.

Speaker Change: Yes.

Speaker Change: Yeah.

Yes.

Speaker Change: And I think your question.

Speaker Change: Yes.

Speaker Change: All right.

Speaker Change: Yeah.

Got it.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Right.

Speaker Change: We start to have.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Steady comps when we get to the back half of the year that have those three years of compounded basis declines in them already.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change:

Speaker Change: And then when you also look at the macro data and just kind of a stabilization cycle, that's been going on the pace of change and the hiring trends.

Speaker Change: Yes.

Speaker Change: Yeah.

Speaker Change: Hi.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Is flattened out a lot so when we looked at our guidance and our budget in our modeling for 2025.

Speaker Change: Especially now.

Speaker Change: Thank you.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: We feel good.

Speaker Change: Okay.

Speaker Change: In terms of our base range in there.

Speaker Change: Right.

Speaker Change: Yes.

Speaker Change: We've got kind of a fairly wide range of.

Speaker Change: No problem.

Speaker Change: Scenarios covered obviously.

Speaker Change: Okay.

Speaker Change: Rejects the current stabilization trend to keep going on but as you get towards the middle of the year you have those compounding comps from the prior years.

Speaker Change: Next question.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: And then like I mentioned in the call earlier.

Speaker Change: Okay.

Speaker Change: And then like Scott mentioned, we've got great productivity on our pipeline new logo upsell cross sell those are triggering as they always have for botox.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Right.

Speaker Change: Okay.

Speaker Change: Right.

Speaker Change: Client bases than our combined client base and as Scott just mentioned a few minutes ago. We're laser focused on retention in those 90, 697% retention levels are now our norm.

Speaker Change: Yes.

Speaker Change:

Speaker Change: Okay.

Speaker Change: That changed.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: And then I'll add a few things.

Speaker Change: [noise] [noise] [noise].

Speaker Change: We're entering 2025, and a very strong position with macro normalization plus strong pipeline conversion.

Speaker Change: Let's just let's just.

Re look at some of the things we talked about in the opening script.

Speaker Change: If you look at.

Speaker Change: A year ago Q4 2023.

Speaker Change: Yes.

Speaker Change: [noise] [noise], we got at the actions.

Speaker Change: <unk> alone first advantage landed 10.

Speaker Change: <unk>.

Speaker Change: New new wins with ACB of of 500.

Speaker Change: A lot of our identified playbook, that's why we didn't take the full range up we were just able to get confidence in some of the programs. We had and then tried to accelerate as many of them as we could either into 'twenty four earlier in the 25, which is why we now think we're over 50% action by the six month Mark that was a year that was the one year Mark when we had talked previously.

Speaker Change: K or more.

Speaker Change: The combined Sterling first advantage team landed 25.

Speaker Change: Wins in Q4.

Speaker Change: And we.

Speaker Change: We're having very very good start from a pipeline standpoint of 2025, which gives us.

Speaker Change: And you don't get there by just one by one function contributing it was across all of our work streams.

Speaker Change: Confidence in the guidance in.

Speaker Change: In fact.

Speaker Change: We did mentioned the large healthcare win which Shlomo asked about but in.

Speaker Change: Got it. Thank you that's helpful. And then I guess more broadly speaking with regards to the Sterling acquisition and integration progress thus far.

Speaker Change: In the script, we also talked about two other very large U S wins, which we're not that health care wind. This is these are two other ones.

Speaker Change: That's a positive development with regards to acceleration of the synergies any other positive developments or surprises, whether it's you know enhance customer value prop innovation are proud of the resilience seasonality and then anything that has been potentially an unpleasant surprise or how you're kind of learning.

Speaker Change: Those two wins.

Speaker Change: Have a potential to beat both of them to be top 10 customers. So first advantage.

Speaker Change: And probably it will take a few months to get revenue going but we expect that revenue to start coming in second half.

Speaker Change: Yes.

Speaker Change: Yeah.

Yeah.

Speaker Change: So again when you can start a year as fast as we have from a sales and pipeline standpoint.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: Thank you.

Speaker Change: Yeah.

Speaker Change: And you can land two deals that potentially could be top 10 customers for you.

Speaker Change: Yes.

Speaker Change: I see.

Speaker Change: Yes.

Speaker Change:

Speaker Change: Bye bye.

Speaker Change: That gives us really really strong confidence in the second half of the year.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: Great Super helpful. And then if I can squeeze in one follow up maybe more broadly.

Speaker Change: These teams are working together, especially on the go to market side on the product side and operations side those are three big areas.

<unk> gotten any any significant insights from customer conversations so far.

Speaker Change: Where the teams are working so well together and it's really because theres a culture match.

Speaker Change: In 2025, and any changes youre seeing to package density or more broadly any changes to client behavior sort of post election.

Speaker Change: I think the biggest thing that can derail any M&A is is cultures that don't match and.

Speaker Change: And we've got two high performing cultures that are working.

Speaker Change: Yeah.

Speaker Change: Really well together, we're also finding a lot of good.

Speaker Change: Talking to customers more now than we ever did.

Speaker Change: Because as we've said couple of times, our laser focus on customer retention and we want to make sure that the communication is crystal clear about our product strategy about our platform strategy and that how it will benefit our customers. So yes, we are having more discussions with our customers.

Speaker Change: Like I would call them Nuggets on the product side and on the API integration sides with data.

Speaker Change: So again this goes back to the best of breed comment where.

Speaker Change: We have found that sterling.

Speaker Change: We're doing some good things.

On the tech and product side.

Speaker Change: Obviously first advantage has been doing a lot of great things on the tech product and automation side.

Speaker Change: And I assume your question is more around what are we hearing from the hiring side.

Speaker Change: And we are hearing normal hiring we are hearing that customers are planning on normal hiring.

Speaker Change: And what we'll be able to do is turn on those things for legacy first advantage customers that we feel but sterling was doing a good job on and legacy Sterling customers for the things that first advantage is doing good good job on and these will all be behind the scenes type of upgrades that client.

Speaker Change: But again, it's the new normal hiring it's not the post pandemic hiring it's the pre pandemic hiring normal cycles they are anticipating.

Speaker Change: Normal growth.

Speaker Change: And I don't think the administration has had any impact on their hiring strategy because there's nothing that's really been rolled out from the new administration yet.

Speaker Change: Really won't.

Speaker Change: C, but we'll feel.

Speaker Change: And they'll feel in.

Speaker Change: The output in terms of faster turnaround times higher quality et cetera. So that's why the clients are so excited about where this tech journey can bring them because they are seeing the best of both worlds product set or platforms that are out there and they're going to have they're going to be start tapping into these in and we're already rolling these.

Speaker Change: We're not hearing anything negative or even positive about that it's really kind of a non event in our customers' eyes right now and until the government rolls out something then we'll obviously react.

Speaker Change: Great. Thanks.

Speaker Change: You bet.

Speaker Change: Things that we've already started rolling out to our legacy Sterling clients and legacy first advantage clients and we have product Roadmaps, where we're gonna be rolling out nice upgrades almost monthly now so.

Speaker Change: We'll take our next question from Manav Patnaik with Barclays. Please go ahead. Your line is open.

Running Kennedy: Hi, Good morning. This is running Kennedy on for Manav. Thank you for taking my question can I, just confirm with the acceleration of the realization for synergies where the bulk of those are coming from and if the actions going forward within the target areas of internal ops fulfillment product commercial have changed or is your expectation for realizing realization.

Speaker Change: So clients really start to feel and see that on the negative side you know it's not really.

Speaker Change: You know obviously the.

Speaker Change: The big concern is.

Speaker Change: Is margins.

Speaker Change: And that's still going to drag.

Speaker Change: The benefits there.

Speaker Change: A bit for us, but we've got a good plan and obviously you guys know our track record on on margins I mean look at Q4 alone.

Speaker Change: Yes, I mean, the acceleration almost was across the board when we talked last call. Our initial focus was on those kind of public company cost.

Speaker Change: It was down from a base standpoint, but we delivered 32% each.

Speaker Change: <unk> being executive leadership, some of those baseline M&A 101 type items.

Speaker Change: EBIT margin on legacy first advantage, so we know how to improve margin.

Speaker Change:

Speaker Change: As a management team, we kind of challenge ourselves to find avenues to accelerate those <unk>.

Speaker Change: We've just got some work to do on it but we've got a great plan in place.

Speaker Change: Thank you I appreciate it.

Speaker Change: Synergies and also it helps with some of the internal integration effort. So.

Speaker Change: We will take our next question from Jeff Silber with BMO capital markets. Please go ahead. Your line is open.

Speaker Change: Quite literally have contributed almost every line of the P&L.

Speaker Change: We got the actions.

Speaker Change: Lot of our identified playbook, that's why we didn't take the full range up we were just able to get confidence in some of the programs. We had and then tried to accelerate as many of them as we could either into 'twenty four earlier in the 25%, which is why we now think we're over 50% action by the six month Mark that was a year that was the one year Mark when we had talked previously.

Speaker Change: Thank you so much just wanted to go back to the synergy you.

Speaker Change: Talked about first advantage being more of a variable model than what you've seen in Sterling can we get some examples of how you're doing that what you're doing from sterling's legacy business to change that.

Speaker Change: Yeah, Jeff and welcome to the calls.

Speaker Change: And you don't get there by just one by one function contributing it was across all of our work streams.

Speaker Change: Certainly.

Speaker Change: First advantage, we've always looked at our fulfillment and operations functions as having a highly variable nature to them.

Speaker Change: Got it. Thank you that's helpful. And then I guess more broadly speaking with regards to the Sterling acquisition and integration progress thus far.

Speaker Change: Third party cost of sales and that's fairly consistent with Sterling are almost 100% volume variable, but certainly on the labor side we.

Speaker Change: That's a positive development with regards to acceleration of the synergies any other positive developments or surprises, whether it's you know enhance customer value prop innovation product the resilient seasonality and then anything that has been potentially an unpleasant surprise there.

Speaker Change: We have a very flexible staffing approach where.

Speaker Change: We do our modeling on volumes and then stopped to a to a metric related to that and then use overtime variable shifts weekends et cetera to modulate the available labor to the inbound orders in a pretty one to one matching ratio.

Speaker Change: Learning versus your expectations.

Speaker Change: Yeah I think.

Speaker Change: Listen it's been a it's been a big effort, we got a lot of people working on this and obviously we closed on on Halloween. So we really couldn't get under the Hood until November 1st I'd say the biggest pleasant surprise by far has been the culture match.

Speaker Change: I think a lot of others in our industry and Sterling included hadn't had a little bit more of a fixed cost mindset, where they stop to kind of.

Speaker Change: Underlying assumption and then it was a fixed cost they had 40 hours per week per employee if you will.

Speaker Change: We've looked at some of that that margin there that that tail end of the of the base volumes as we can use that variable funding of our labor and that workforce management and it takes some time to adapt.

Speaker Change: It's just amazing how well these teams are working together, especially on the go to market side on the product side and operations side. Those are three big areas, where the teams are working so well together and it's really because theres a culture match.

Speaker Change: And kind of putting the right tracking tools and forecasting tools and then planning tools in place, but that's been a focus of the operations team since day one.

Speaker Change: We're call it 120 days and we're getting very close to having some of those methodologies across the board. So that's how we handle it from a staffing standpoint, and then I think the other big margin difference between first advantage in Sterling there just been some of them that shift in mix.

Speaker Change: I think the biggest thing that can derail any M&A is is cultures that don't match.

Speaker Change: And we've got two high performing cultures that are working.

Speaker Change: Really well together, we're also finding a lot of good.

Speaker Change: As we've talked about a couple of times and this is coupled into our integration and synergy program.

Speaker Change: Like I would call them Nuggets on the product side and on the API integration sides with data.

Speaker Change: Sterling with their bolt acquisition had their legacy drug in health care Wellness program. They had the one they acquire cobalt first advantage has all of that in Orwell. This platform as well so a part of our synergy and integration program is harmonizing that down instead of having three of everything effectively to get to a one best in class so between instilling.

Speaker Change: So again this goes back to the best of breed comment where.

Speaker Change: We have found that sterling.

Speaker Change: We're doing some good things.

Speaker Change: On the tech and product side.

Speaker Change: Obviously first advantage has been doing a lot of great things on the tech product and automation side.

That workforce management, and then kind of de duplicating the fulfillment of some of those wellness, which are the lower mix services that we've been referring to a lower margin mix that we've been referring to.

Speaker Change: Our game plan for 2025, and part of that 150 basis point lift.

Speaker Change: EBITDA margin at the midpoint.

Speaker Change: Hey, Jeff.

Speaker Change: Really won't.

Jeff Silber: Yeah definitely add that will you know we also have a plan to reduce head count on the sterling side through automation.

Speaker Change: C, but will feel.

Speaker Change: And they'll feel in.

Speaker Change: Output in terms of faster turnaround times higher quality et cetera. So that's why the clients are so excited about where.

Speaker Change: First advantages.

Jeff Silber: Highly automated and and.

Speaker Change: Where this tech journey can bring them because they are seeing the best of both worlds products that are platforms that are out there and theyre going to have they're going to be start tapping into these and we're already rolling these out.

Jeff Silber: As we again rollout that best of breed automation to legacy.

Jeff Silber: Sterling clients that will allow us to give some flexibility on the head count side and a great example of that is you know.

Jeff Silber: I think you guys have heard you know for over a year now about our click chat call.

Speaker Change: That we already started rolling out to our legacy Sterling clients and legacy first advantage clients.

Jeff Silber: <unk> on customer care and Sterling didn't doesn't have that and so we'll be rolling that out.

Speaker Change: We have product Roadmaps, where we're gonna be rolling out nice upgrades almost monthly now.

Speaker Change: So clients will really start to feel and see that on the negative side, you know not really.

Jeff Silber: In the very near term to legacy Sterling customers, which will give them the advantage of using chat AI chat to.

Speaker Change: You know.

Speaker Change: Obviously the.

The big concern is.

Speaker Change: Is margins.

Jeff Silber: You know to get order status and things like that which will allow us to.

Speaker Change: And that's still going to drag.

Speaker Change: A bit for us, but we've got a good plan and obviously you guys know our track record on on margins I mean look at Q4 alone.

Jeff Silber: Or rationalize some of the head count on that side and as we rollout even.

Jeff Silber: Things like a gen take AI we.

Speaker Change: It was down from a base standpoint, but we delivered 32%.

Jeff Silber: You know you know even further synergies on the head count side. So we're feeling pretty good about how we can optimize both both the organizations head count with with automation.

Speaker Change: EBIT margin on legacy first advantage, so we know how to improve margin.

Speaker Change: And we've just got some work to do on it but we've got a great plan in place.

Jeff Silber: Okay. That's really helpful. And then in your press release, you say do you expect the base will remain a headwind through the middle of the year is it just that the comps get easier in the back half of the year are you expecting any major changes from a macro perspective any color would be great.

Speaker Change: Thank you I appreciate it.

Speaker Change: We'll take our next question from Jeff Silber with BMO capital markets. Please go ahead. Your line is open.

Speaker Change: Thank you so much just wanted to go back to the synergy you talked about.

Jeff Silber: Yeah, I mean, Jeff that the fundamentals of it as hey, you've got easier comps and as I mentioned, a little while ago right at your third year of compounded maybe declines when you get to the middle of the year. So that certainly is a major factor and then also it's just there has been a broad stabilization trend and we're just seeing that start to play out when you look at the hiring volumes.

Speaker Change: First advantage being more of a variable model than what you've seen in Sterling can we give some examples of you know.

Speaker Change: How youre doing that what you're doing from sterling's legacy business to change that.

Speaker Change: Yeah, Jeff and welcome to the call.

Speaker Change: Certainly.

Jeff Silber: And some of the other metrics beat them.

Speaker Change: First advantage, we've always looked at our fulfillment and operations functions as having a highly variable nature to them.

Jeff Silber: Those have all been declining now for a couple of years, but the pace of decline has flattened out a lot over the last three to six months.

Speaker Change: Third party cost of sales and that's fairly consistent with Sterling are almost 100% volume variable, but certainly on the labor side.

Jeff Silber: Expect that normalization and stabilization to continue and then once you get to the middle of the year, you've got that that stabilization trend compounded windows those easier comps just as kind of what drives it but like I said a couple of times when you zoom out and look at the year as a total we still look at that.

Speaker Change: We have a very flexible staffing approach where.

Speaker Change: We do our modeling on volumes and then staff to a metric related to that and then use overtime variable shifts weekends et cetera to modulate the available labor to the inbound orders in a pretty one to one matching ratio.

Jeff Silber: In all parts of our range basically be negative.

Jeff Silber: The only thing I would.

Jeff Silber: Throw in there too is.

Jeff Silber: The sales engine has been firing on all cylinders for a while now so we will be you know will get some revenue conversion that things that go from new logo or up sell cross sell into base.

Speaker Change: I think a lot of others in our industry and Sterling included hadn't had a little bit more of a fixed cost mindset, where they stopped to kind of underlying assumption and then it was a fixed cost. They had 40 hours per week per employee if you will.

Jeff Silber: That will start helping us in there.

Jeff Silber: Latter half of the year as well.

Speaker Change: We've looked at some of that margin there that tail end of the of the base volumes as we can use that variable function of our labor and that workforce management and it takes some time to adapt.

Jeff Silber: Alright, thanks, so much.

Speaker Change: As a reminder, if you'd like to ask a question today. Please press star and one keys on your telephone keypad, we will take our next question from Kyle Peterson with Needham. Please go ahead. Your line is open.

Speaker Change: And kind of putting the right tracking tools and forecasting tools and then planning tools in place, but that's been a focus of the operations team since day one.

Jeff Silber: Great good.

Kyle Peterson: Good morning, guys. Thanks for taking the questions I wanted to start off on some of the expectations for you.

Speaker Change: We're call it 120 days and we're getting very close to having some of those methodologies across the board. So that is how we handle it from a staffing standpoint, and then I think the other big margin difference between first advantage in Sterling there just been some of them that shift in mix and as we've talked about a couple of times and this is coupled into our integration and synergy.

Jeff Silber: Vertical performance this year I know there's some.

Jeff Silber: Some moving pieces in different mix, especially between legacy first vantage in Sterling. So I guess any any color or any assumptions embedded in your guidance for whether it's vertical so you expect to be particularly strong or bigger headwinds.

Speaker Change: Program.

Speaker Change: Sterling with their bolt acquisition had their legacy drug in health care Wellness program. They had the one they acquire Commvault first advantage has all of that in Orwell Mis platform as well so a part of our synergy and integration program is harmonizing that down instead of having three of everything effectively to get to one best in class so between instilling.

Jeff Silber: In 2025, I think would be really helpful.

Jeff Silber: Yeah, Kyle I think not a lot of specific verticals to call out from a base perspective, because that normalization trend and now that we're kind of hitting your three kind of made its way through all of them I know you're on the path on the legacy side, we highlighted the strength of.

Speaker Change: Workforce management, and then kind of de duplicating the fulfillment of some of those wellness, which are the lower mix services that we've been referring to a lower margin mix that we've been referring to.

Jeff Silber: Retail and transportation, but like Scott mentioned not that long ago.

Jeff Silber: The updated assumptions and trends around peak or certainly baked into our guidance and I think that guidance pretty well now has it baked in across all verticals that stabilization trend I think the callout that I would say and Mike Scott just mentioned.

Speaker Change: That's all on our game plan for 2025, and part of that 150 basis points lift.

Speaker Change: EBITDA margin at the midpoint.

Jeff Silber: Hey, Jeff.

Jeff Silber: Yeah definitely add that will you know we also have a plan to reduce head count on the sterling side through automation.

Jeff Silber: The pipeline and momentum in go to market, we highlighted the the deal in retail the deal in health care that Scott talked about those will help drive strengthen those obviously, but from that controllable revenue standpoint that upsell cross sell new logo and then retention trends are strong across all verticals.

Jeff Silber: First advantages.

Jeff Silber: Harley automated and and.

Jeff Silber: As we again rollout that best of breed automation to legacy <unk>.

Jeff Silber: Sterling clients that will allow us to give some flexibility on the head count side and a great example of that is.

Jeff Silber: And also kind of what we can do.

Jeff Silber: We expect that international rebound will continue.

Jeff Silber: I think you guys have heard for over a year now about our click chat call punch.

Jeff Silber: What we've seen out of international in the last two quarters has been very encouraging. So we expect the international even though even though it's only 13% of the business, we expect that to continue to rebound nicely.

Jeff Silber: Functionality on customer care and Sterling didn't doesn't have that and so we'll be rolling that out.

Jeff Silber: In the very near term to legacy Sterling customers, which will give them the advantage of using chat AI chat too.

Jeff Silber: Got it.

Jeff Silber: That's really helpful and I guess, just a follow up and kind of switching over to the balance sheet and leverage.

Jeff Silber: All the color and I know the margins are pretty solid and should get better as the year progresses, but how are you guys thinking about the piece of Delever.

Jeff Silber: To get order status and things like that which will allow us to.

Jeff Silber: <unk> some of the head count on that side and as we rollout even.

Jeff Silber: Deleveraging and priorities here, whether it's just bill.

Jeff Silber: Things like <unk> AI.

Jeff Silber: Building cash and scaling EBITDA or are you guys looking at potentially pre.

We expect.

Jeff Silber: Even further synergies on the head count side, So we're feeling pretty good about how we can optimize both both the organizations.

Jeff Silber: Prepaying some debt like how should we kind of think about your plans for the balance sheet.

Jeff Silber: Over the next.

Jeff Silber: You know a few quarters here.

Jeff Silber: Head count with with automation.

Jeff Silber: Yes.

Jeff Silber: Certainly Karl to start right, we do have some.

Jeff Silber: Okay. That's really helpful. And then in your press release, you say do you expect the Batesville remain a headwind through the middle of the year is it just that the comps get easier in the back half of the year are you expecting any major changes from a macro perspective any color would be great.

Speaker Change: But little about $5 million mandatory prepayments that we'll make on schedule at the end of every quarter that started here in March so there'll be there's about $22 million of that baked into our model and it should be baked into assumptions at a minimum.

Jeff Silber: Yes, I mean, just the fundamentals of it as hey, you've got easier comps and as I mentioned, a little while ago right at your third year of compounded base declines when you get to the middle of the year. So that certainly is a major factor and then also it just there has been a broad stabilization trend and we're just seeing that start to play out when you look at the hiring volumes.

Jeff Silber: We do expect free cash flow.

Jeff Silber: You know to be positive obviously in the year somewhere in the 55% to $85 million range is based on our guidance.

Jeff Silber: And then when you kind of convert that over to leverage there will be some deleveraging.

Jeff Silber: But the synergy programs, even if we've got half of those are executed midway through the year, let's call. It.

Speaker Change: And some of the other metrics.

Speaker Change: Those have all been declining now for a couple of years, but the pace of decline has flattened out a lot over the last three months to six months.

Jeff Silber: 2026 will be the real year of deleveraging because you'll have a full year run rate benefit of those in your actual result, then in your cash flow, but there will be some modest deleveraging in 2025.

Speaker Change: You kind of expect that normalization and stabilization to continue and then once you get to the middle of the year, you've got that that stabilization trend compounded windows those easier comps is kind of what drives it but like I said a couple of times when you zoom out and look at the year as a total we still look at that at all parts of our range basically be negative.

Jeff Silber: Okay.

Speaker Change: I appreciate all the color and thanks for taking the questions guys.

Speaker Change: We will take our next question from Scott <unk> with Wolfe Research. Please go ahead. Your line is open.

The only thing I would.

Speaker Change: Hey, good morning, guys. Thank you for taking my question. So I just wanted to touch on the acceleration in growth on the legacy Sterling Upsell Cross sell and if you could touch on what has driven that over the last couple of quarters and then if there is anything you know on their go to market side that they're executing on that you think you can may be sold into.

Speaker Change: Throw in there too is.

Speaker Change: The sales engine has been firing on all cylinders for a while now so we will be well get some revenue conversion that things that go from new logo or upsell cross sell into base.

Speaker Change: That will start helping us in the latter half of the year as well.

Speaker Change: Alright, thanks, so much.

Speaker Change: Salesforce to maybe realize some incremental upsell cross sell acceleration growth on your side as well thanks.

Speaker Change: As a reminder, if you'd like to ask a question today. Please press the star and one keys on your telephone keypad.

Speaker Change: Yeah, So Scott Mcqueen mechanically on the on the legacy Sterling side, they had a couple of larger upsells.

Speaker Change: We'll take our next question from Kyle Peterson with Needham. Please go ahead. Your line is open.

Speaker Change: I think they announced it and it was the last time they did earnings but it was the end of 2023 that went live in 2024 and that was on their health care space and some of those medical services that was their largest ever upsell. So obviously, we got the full year benefit of that essentially in their 2024 results.

Kyle Peterson: Great. Good morning, guys. Thanks for taking the questions I wanted to start off on some of the expectations for.

Speaker Change: Vertical performance this year I know there's some.

Speaker Change: Some moving pieces in different mix, especially between legacy first vantage in Sterling. So I guess any any color or any assumptions embedded in your guidance for whether it's vertical do you expect to be particularly strong or bigger headwinds.

Speaker Change: And I'll, let Scott give some more color on in a second but the sterling productivity out of frankly, the entire sales force, including the Sterling He has been phenomenal.

Speaker Change: Even if you look at the more recent success 25 enterprise bookings in Q4.

Speaker Change: In 2025, I think would be really helpful.

Speaker Change: Look at last year Standalone FAA was only 10, so not only did the transaction not distract the team from from productivity, but we've actually outperformed the prior year. If you will can you just double them up from kind of the relative scale. So.

Speaker Change: Yeah, Kyle I think not a lot of specific verticals to call out from a base perspective, because that normalization trend and now that we're kind of hitting your three kind of made its way through all of them I know on the past on the legacy side, we highlighted the strength of.

Speaker Change: They're there.

Speaker Change: The <unk> acquisition. They did while the margins are what we would desire against Sterling a couple new avenues to cross sell into the base and they've done a really nice job of executing on that plan.

Scott Peeples: Retail and transportation, but like Scott mentioned not that long ago.

Scott Peeples: The updated assumptions and trends around peak or certainly baked into our guidance and I think that guidance pretty well now has it baked in across all verticals that stabilization trend I think the call out that I would say and Mike Scott just mentioned.

Speaker Change: And Scott the only thing I would add is as I mentioned earlier, the especially the go to market teams are working extremely well together, it's almost like we've been together for years now not months.

Speaker Change: And I think what one it's important to talk about numbers like 25 wins last quarter and a N and obviously a great start to the year. So the numbers are significant but what's more important is that that shows that there's no hesitation in the market about this acquisition that new logo.

Scott Peeples: The pipeline and momentum in go to market, we highlighted the.

Scott Peeples: Deal in retail the deal in healthcare that Scott talked about those will help drive strengthen those obviously, but from that controllable revenue standpoint that upsell cross sell new logo and then retention trends are strong across all verticals.

Speaker Change: Those are still coming to us and actually now maybe are coming to us at an accelerated rate.

Scott Peeples: And also kind of what we can.

Scott Peeples: We expect that international rebound will continue.

Scott Peeples: We've seen that in international in the last two quarters, it's been very encouraging so we expect the international even though even though it's only 13% of the business, we expect that to continue to rebound nicely.

Speaker Change: Because of the combined entity the Tech story, the best of breed story, that's out there, but the deep vertical story that we've got so we're obviously encouraged by the numbers themselves.

Scott Peeples: Got it.

Scott Peeples: That's really helpful.

Speaker Change: But what's more important is that the sentiment and the C and the new logo space.

Speaker Change: I guess, just a follow up and kind of switching over to the balance sheet and leverage I. Appreciate all the color and I know the margins are.

Speaker Change: You know it certainly in favor of the merger.

Speaker Change: Solid and should get better as the year progresses, but how are you guys thinking about the piece of it.

Speaker Change: Okay Super helpful and then just as a.

Speaker Change: Quick follow up on guidance I know, you're orienting towards the pro forma growth, but I'm just wondering if theres any color you can give on your expectations for legacy first advantage growth for the year. Thanks.

Speaker Change: Deleveraging and priorities here or whether it's just.

Speaker Change: Building cash and scaling EBITDA, how are you guys looking at potentially pre.

Speaker Change: Prepaying some debt like how should we kind of think about your plans for the balance sheet.

Speaker Change: Yeah.

Speaker Change: Largely.

Speaker Change: Over the next.

Speaker Change: Scott.

Speaker Change: A few quarters here.

The two segments or the two historical businesses are relatively in line as I mentioned, we're kind of expecting the historical growth algorithms upsell cross sell new logo and retention to be in line candidly like you know like you've heard the story as Scott mentioned the lines get a little blurred because theres a pipeline opportunity that developed out of legacy Levant.

Speaker Change: Yes, Sir.

Speaker Change: Certainly Kyle to start right, we do have some.

Speaker Change: But little about $5 million mandatory prepayments that we'll make on schedule at the end of every quarter that starts.

Speaker Change: Here in March so there'll be there's about $22 million of that baked into our model and should be baked into assumptions at a minimum.

Speaker Change: That the legacy Sterling No front end platform may be the best solution and we've had situations where the opposite is true too so.

Speaker Change: We do expect free cash flow.

Speaker Change: Yeah.

Speaker Change: Positive obviously in the year somewhere in the 55% to $85 million range is based on our guidance.

Speaker Change: That's kind of why we are starting to look at things on a consolidated basis, because we're able to leverage our combined strength to up to the impact of the consolidated customer base versus kind of looking at the businesses.

Speaker Change: And then when you kind of convert that over to leverage there will be some deleveraging.

Speaker Change: But the synergy program, even if we've got half of those are executed midway through the year, let's call. It.

Speaker Change: As two standalone, but yes.

Speaker Change: I would.

Speaker Change: Just looking at the trend largely the base trends are in line and new logo cross sell between the two legacy businesses are largely in line. There's nothing distinct between the two that makes you makes you.

Speaker Change: 2026 will be the real year of deleveraging because you'll have a full year run rate benefit of those in your actual result, then in your cash flow, but there will be some modest deleveraging in 2025.

Speaker Change: Say one's going to completely perform differently than the other.

Speaker Change: Okay.

Speaker Change: And I would just add that.

Speaker Change: Appreciate all the color and thanks for taking the questions guys.

Speaker Change: It's important to note, we're not thinking that way anymore.

Speaker Change: We will take our next question from Scott <unk>.

Speaker Change: I think what's what's given us a lot of success in the early days of this integration is to not think about legacy first advantage and legacy Sterling in fact.

Scott Peeples: With Wolfe Research. Please go ahead your line is open.

Scott Peeples: Hey, good morning, guys. Thank you for taking my questions. So I just wanted to touch on the acceleration in growth on the legacy Sterling Upsell Cross sell and if you could touch on what has driven that over the last couple of quarters and then if there is anything you know on their go to market side that they're executing on that you think you can maybe fold into the FIA sales.

Speaker Change: The words, we don't use anymore internally, we'll use them with you today, because obviously, there's financial things separate but we don't say those words anymore internally, we're operating as one company.

Speaker Change: So I think when you would look at you know.

Speaker Change: What's going to happen in these these businesses, we see it as one business going forward.

Scott Peeples: <unk> to maybe realize some incremental.

Scott Peeples: So cross sell acceleration growth on your side as well thanks.

Speaker Change: And that's you can also see in our org structures and if you look at our go to market team. For example, it's about 50 50 Sterling leaders first advantage leaders.

Scott Peeples: Yeah, So Scott mechanically on the on the legacy Sterling side, they had a couple of larger upsells.

Scott Peeples: I think they announced it on it was the last time they did earnings but it was the end of 2023 that went live in 2024 that was on their health care space I mean, some of those medical services that was their largest ever upsell. So obviously, we got the full year benefit of that essentially in their 2024 results.

Speaker Change: And we've got Sterling leaders now running first advantage accounts and first advantage leaders running Sterling accounts. It's one company going forward. It's a it is this new co mentality that has really galvanize the team and giving US a lot of momentum. So I. Appreciate the question, but I just think it's important to note.

Scott Peeples: And I'll, let Scott give some more color on in a second but the sterling.

Scott Peeples: Productivity out of frankly, the entire sales force, including the Sterling. He has been phenomenal we got even if you look at the more recent success 25 enterprise bookings in Q4, if you look at last year Standalone FAA was only 10, so not only did the transaction not distract the team from from productivity, but we've.

Speaker Change: But culturally.

Speaker Change: And organically and structurally we are not thinking legacy anything anymore.

Speaker Change: Got it thanks guys.

Speaker Change: And no further questions on the line.

Speaker Change: Okay.

Speaker Change: Perfect.

Scott Peeples: <unk> outperformed the prior year, if you will I mean, you just double them up from kind of the relative scale. So I think the <unk> acquisition.

Speaker Change: Okay.

Speaker Change: Thanks, everybody.

Speaker Change: During the call today.

Scott Peeples: Acquisition. They did while the margins are what we would desire again Sterling a couple new avenues to cross sell into those into their base and they've done a really nice job of executing on that plan.

Speaker Change: Right.

Speaker Change: Okay.

Speaker Change: Thank you all for joining us today.

Speaker Change: Okay.

Speaker Change: Thank you.

Scott Peeples: And Scott the only thing I would add is as I mentioned earlier.

Speaker Change: For some clients.

Scott Peeples: Especially the go to market teams are working extremely well together, it's almost like we've been together for years now not months.

Speaker Change: Yeah.

Speaker Change: Thanks.

Speaker Change: Okay.

Speaker Change: At this time.

Speaker Change: Okay.

Scott Peeples: And I think what one it's important to talk about numbers like 25 wins last quarter in it.

Speaker Change: [noise] [noise].

Scott Peeples: Obviously, a great start to the year. So the numbers are significant but what's more important is that that shows that there's no hesitation in the market about this acquisition that new loans are still coming to us and actually now maybe are coming to us at an accelerated rate.

Scott Peeples: Because of the combined entity the Tech story, the best of breed story, that's out there, but the deep vertical story that we've got so we're obviously encouraged by the numbers themselves.

Scott Peeples: But what's more important is that the sentiment and the in the new logo space.

Scott Peeples:

Scott Peeples: Certainly in favor of the merger.

Scott Peeples: Super Helpful and then just as a.

Speaker Change: Quick follow up on guidance I know, you're orienting towards the pro forma growth, but I'm just wondering if theres any color you could give on your expectations for legacy first advantage growth for the year. Thanks.

Scott Peeples: Yes.

Scott Peeples: Largely.

Scott Peeples: Scott.

Scott Peeples: The two segments or the two historical businesses are relatively in line as I mentioned, we're kind of expecting the historical growth algorithms upsell cross sell new logo and retention to be in line candidly like you've heard the story as Scott mentioned the lines get a little blurred because theres a pipeline opportunity that developed out of legacy <unk>.

Scott Peeples: The advantage that the legacy Sterling No front end platform may be the best solution and we've had situations where the opposite is true too so it's that.

Scott Peeples: That's kind of why we are starting to look at things on a consolidated basis, because it's we're able to leverage our combined strength to it the impact the consolidated customer base versus kind of looking at the businesses.

Scott Peeples: As two standalone, but yes.

Scott Peeples: I would.

Speaker Change: Say, one is going to completely performed differently than the other.

Speaker Change: I would just add that.

Speaker Change: I think it's important to note, we're not thinking that way anymore.

Speaker Change: I think what's what's given us a lot of success in the early days of this integration is to not think about legacy first advantage and legacy Sterling in fact.

Speaker Change: Our words, we don't use anymore internally, we'll use them with you today, because obviously theres financial things separate but we don't say those words anymore internally, we are operating as one company.

Speaker Change: So I think when you look at.

Speaker Change: What's going to happen in these these businesses, we see it as one business going forward.

And that's you can also see in our org structures and if you look at our go to market team. For example, it's about 50 50 Sterling leaders first advantage liters.

Speaker Change: And we've got Sterling leaders now running first advantage accounts and first advantage leaders running Sterling accounts, It's one company going forward. It's a it is.

Speaker Change: This new co mentality that has really galvanize the team and given us a lot of momentum so.

Speaker Change: The question, but I just think it's important to note that.

Speaker Change: Culturally.

Speaker Change: And organically and structurally we are not thinking legacy anything anymore.

Speaker Change: Got it thanks guys.

Speaker Change: And there are no further questions on the line at this time I'll return the program to our speakers for any closing remarks.

Well listen to.

Speaker Change: Want to thank everybody for joining the call today. Thanks for their continued support and the first advantage story I look forward to connecting take care.

Speaker Change: Okay.

Speaker Change: Thank you all for joining us today and thank you for your participation. This concludes the first advantage fourth quarter and full year 2024 earnings conference call and webcast. At this time you may disconnect your lines and have a wonderful day.

Speaker Change: [noise] mhm.

Speaker Change: Hum.

Q4 2024 First Advantage Corp Earnings Call

Request a DemoDemo

First Advantage

Earnings