Q3 2025 First Advantage Corp Earnings Call

Call and webcast hosting the call today from first advantage is Stephney Gorman Vice President of Investor Relations at this time all participants have been.

Operator: 2025 Earnings Conference Call and Webcast. Hosting the call today from First Advantage is Stephanie Gorman, Vice President of Investor Relations. At this time, all participants have been placed in listen-only mode to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this 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 two. Lastly, if you should require operator assistance, please press star zero. Please note today's event is being recorded. It is now my pleasure to turn the call over to Stephanie Gorman. You may begin.

Just in listen only mode to prevent any background noise. After the Speakers' remarks, there will be a question and answer session. If he would like to ask a question. During this 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. Two lastly, if you should require opera.

Later assistance. Please press Star Zero. Please note today's event is being recorded it is now my pleasure to turn the call over to Stephanie Gorman you may begin.

Thank you Sabrina and good morning, everyone and welcome to the first advantages third quarter 2025 earnings conference call in the investors section of our website you will find the earnings press release and slide presentation to accompany today's discussion. This webcast is being recorded and will be available for replay on our investor Relations website.

Stephanie Gorman: Thank you, Sabrina. Good morning, everyone, and welcome to First Advantage's Q3 2025 Earnings Conference Call. In the Investors section of our website, you will find the earnings press release and slide presentation to accompany today's discussion. This webcast is being recorded and will be available for replay on our investor relations website. Before we begin our prepared remarks, I would like to remind everyone that our discussion today will include forward-looking statements. Such forward-looking statements are not guarantees of future performance. Actual 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 2024 Form 10-K and our Form 10-Q for Q3 2025 to be filed with the SEC.

Before we begin our prepared remarks, I would like to remind everyone that our discussion today will include forward looking statements such forward looking statements are not guarantees of future performance actual 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.

And our filings with the SEC, including our 2024 Form 10-K, and our Form 10-Q for the third quarter of 2025 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.

Stephanie Gorman: 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. Throughout this conference call, we will also present and discuss non-GAAP financial measures. Reconciliations of our non-GAAP financial measures to their most directly comparable GAAP financial measures, to the extent available without unreasonable effort, appear in today's earnings press release and presentation, which are available on our investor relations websites. To facilitate comparability, we will also discuss pro forma combined company results consisting of First Advantage and Sterling Check Corp historical results and certain pro forma adjustments as if the acquisition of Sterling had occurred on 1 January 2023. The pro forma information does not constitute Article 11 pro forma information. I'm joined on our call today by Scott Staples, our Chief Executive Officer, and Steven Marks, our Chief Financial Officer.

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

To facilitate comparability, we will also discuss pro forma combined company results consisting of first advantage in Sterling <unk> historical results and certain pro forma adjustments as if the acquisition of Sterling had occurred on January one 2023 the.

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

I'm joined on our call today by Scott Staples, Our Chief Executive Officer, and Steven <unk>, Our Chief Financial Officer. After our prepared remarks, we will take your questions I will now hand, the call over to Scott.

Stephanie Gorman: After our prepared remarks, we will take your questions. I will now hand the call over to Scott.

Thank you Stephanie and good morning, everyone. Thank you for joining our call we have four key messages for today.

Scott Staples: Thank you, Stephanie, and good morning, everyone. Thank you for joining our call. We have 4 key messages for today. First, we delivered another quarter of profitable growth, meeting and exceeding our expectations with revenues up approximately 4% year-over-year on a pro forma basis and achieving adjusted EBITDA margins of 29%. Our performance was driven by continued go-to-market success in new logo and upsell cross-sell. This demonstrates our ability to generate solid results amid the current macroeconomic environment in which hiring growth has been consistently flat while maintaining our relentless focus on cost discipline. Second, just last week, we celebrated the 1-year anniversary of closing on our Sterling acquisition. I am extremely pleased with the performance of our entire team as our integration is progressing ahead of schedule, and we are delivering strategic and financial benefits as promised.

First we delivered another quarter of profitable growth meeting and exceeding our expectations with revenues up approximately 4% year over year on a pro forma basis, and achieving adjusted EBITDA margins of 29%.

Speaker #1: 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 2024 form 10-K and our form 10-q for the third quarter of 2025 to be filed with the SEC .

Speaker #1: Engine . We are leveraging years of investment engineering and development in robotic process automation APIs and AI . We have kept two front end platforms for customer continuity , but behind the scenes , we have been able to streamline workflows , cut redundancies and drive efficiency .

Our performance was driven by continued go to market success, and new logo and upsell cross sell.

This demonstrates our ability to generate solid results amid the current macroeconomic environment, and which hiring growth has been consistently flat.

Speaker #1: 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 throughout this conference call .

While maintaining our relentless focus on cost discipline.

Speaker #1: These efficiencies not only enhance speed and customer satisfaction , but are also expected to create meaningful margin improvement as we grow . Additionally , since announcing the sterling acquisition , we have increased our synergy target from our original $50 million plus to a range of 65 to $80 million .

Second just last week, we celebrated the one year anniversary of closing on our Sterling acquisition.

Speaker #1: We will also present and discuss non-GAAP financial measures , reconciliations of our non-GAAP financial measures to their most directly comparable GAAP financial measures .

I am extremely pleased with the performance of our entire team as our integration is progressing ahead of schedule and we are delivering strategic and financial benefits as promised.

Speaker #1: 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 #1: We have also made solid progress on deleveraging our balance sheet as we work towards our target net level range of 2 to 3 times .

Third we are continuing to execute on our <unk> strategy Actioning, our best of breed product and platform approach to accelerate growth through new logos upsell cross sell and improve client retention.

Scott Staples: Third, we are continuing to execute on our FA 5.0 strategy, actioning our best-of-breed product and platform approach to accelerate growth through new logos, upsell, cross-sell, and improve client retention. Today, we will highlight how our technologies and products are enhancing our value proposition and solving customers' critical needs. Fourth, today, we are narrowing our full year 2025 guidance ranges with refined midpoints at or above our original guidance midpoints. Turning to slide 5 and a closer look at our performance in the Q3. We generated solid results across revenue, adjusted EBITDA and margin, cash flow, and EPS. For Q3, combined upsell, cross-sell, and new logo rates continued to perform in line with our long-term growth algorithm targets.

Speaker #1: To facilitate comparability , we will also discuss pro forma combined company results consisting of FIRST ADVANTAGE CORP and Sterling Check Corp. historical results and certain pro forma adjustments .

Speaker #1: Steven will provide additional details shortly on both our synergy progress and deleveraging . Turning to slide seven . Throughout the integration process , we have been focused on enhancing our customer value proposition to unlock new logo upsell and cross-sell opportunities while continuing to drive innovation and fun for we are consistently leveraging our best of breed approach to provide optimal solutions and technologies to solve our customers challenges .

Speaker #1: As if the acquisition of Sterling had occurred on January 1st , 2023 , the pro forma information does not constitute article 11 pro forma information .

Today, we will highlight how our technologies and products are enhancing our value proposition and solving customers' critical needs.

And fourth today, we are narrowing our full year 2025 guidance ranges with refined midpoint at or above our original guidance midpoint.

Speaker #1: I'm joined on our call today by Scott Staples , our chief executive officer , and Steven Marks , our chief financial officer . We will take your questions .

Speaker #1: I will now hand the call over to Scott .

Speaker #1: Last quarter , we discussed how the expansion of our award winning click chat call customer care solution and our high margin first advantage work opportunity tax credit product have benefited our customers .

Speaker #2: Thank you , Stephanie , and good morning , everyone . Thank you for joining our call . We have four key messages for today .

Now turning to slide five and a closer look at our performance in the third quarter we.

Speaker #2: First , we delivered another quarter of profitable growth meeting and exceeding our expectations with revenues up approximately 4% year over year on a pro forma basis .

We generated solid results across revenue adjusted EBITDA and margin cash flow and EPS.

Speaker #1: We have continued this progress , achieving a milestone in Q3 . With the increased usage of the millions of records in our proprietary National Criminal Record Fire database across both platforms , something we have been rolling out since Q1 of this year .

For Q3, combined upsell cross sell and new logo rates continued to perform in line with our long term growth algorithm targets.

Speaker #2: And achieving adjusted EBITDA margins of 29% . Our performance was driven by continued go to market success in new logo and upsell , cross-sell .

Speaker #1: With our proprietary data and in-house data science teams , we deliver faster insights and a superior experience for everyone from recruiters to HR teams to candidates .

Retention improved to 97% an increase from 96% in Q2, demonstrating the success of our customer centric approach and that our best of breed technology and deep vertical expertise are resonating with the market.

Scott Staples: Retention improved to 97%, an increase from 96% in Q2, demonstrating the success of our customer-centric approach and that our best-of-breed technology and deep vertical expertise are resonating with the market. We are pleased to share that we recently signed an exclusive 5-year contract renewal with a top customer that is expected to generate over $100 million in total revenues, of which a significant portion is guaranteed through minimum annual commitments. Base revenue performance again improved sequentially, remaining just below neutral and consistent with our expectations. In Q3, our large new logo win in healthcare went live and is the last of the 3 large wins we have discussed with you on past earnings calls to do so.

Speaker #2: This demonstrates our ability to generate solid results amid the current macroeconomic environment in which hiring growth has been consistently flat . While maintaining our relentless focus cost discipline .

Speaker #1: This powers our ability to reduce turnaround time while increasing the speed , coverage and effectiveness of our criminal screenings , facilitating comprehensive and timely results for our customers .

We are pleased to share that we recently signed an exclusive five year contract renewal with a top customer that is expected to generate over $100 million in total revenues of which a significant portion is guaranteed through minimum annual commitments.

Speaker #2: Second , just last week we celebrated the one year anniversary of closing on our sterling acquisition . I am extremely pleased with the performance of our entire team as our integration is progressing ahead of schedule and we are delivering strategic and financial benefits as promised .

Speaker #1: In October , we made available our criminal and motor vehicle records monitoring solutions to the entire customer base , offering another best of breed experience to all of our customers .

Speaker #1: We are also underway in leveraging our best of breed approach to enhance the user experience . Over the past 18 months , we have been rolling out a new applicant portal .

Base revenue performance again improved sequentially remaining just below neutral and consistent with our expectations.

Speaker #2: Third , we are continuing to execute on our . Far five point strategy Actioning our best of breed product and platform approach to accelerate growth through new logos , upsell , cross-sell and improved client retention .

In Q3, our large new logo win in health care went live and is the last of the three large wins, we have discussed with you on past earnings calls to do so.

Speaker #1: Now , approximately half of our order volume on the first advantage front front end runs through this portal with customer adoption continuing to grow .

Speaker #2: Today , we will highlight how our technologies and products are enhancing our value proposition and solving customers critical on needs . And fourth , today we are narrowing our full year 2025 guidance ranges with refined midpoints at or above our original guidance midpoints .

Bind with the two wins that went live last quarter, one in the retail gig economy and the other in international win in Australia.

Scott Staples: Combined with the two wins that went live last quarter, one in the retail gig economy and the other in international win in Australia, all are now live and generating revenue, providing solid momentum going into Q4. We are experiencing tremendous success with our go-to-market teams as further supported by our 17 enterprise bookings in Q3 and 75 in the last 12 months, each with $500,000 or more of expected annual contract value. These wins give us confidence in our ability to generate new logo and upsell/cross-sell revenue and are encouraging sign of our sustained go-to-market momentum since closing the Sterling acquisition 1 year ago. We are encouraged by the strength of our late-stage pipeline, with many large potential new contracts in the works, including several that are incorporating our Digital Identity product for the first time.

All are now live and generating revenue, providing solid momentum going into Q4.

We are experiencing tremendous success with our go to market teams as further supported by our 17 enterprise bookings in the third quarter and 75 in the last 12 months, each with $500000 or more of expected annual contract value.

Speaker #2: Now, turning to slide five and a closer look at our performance in the third quarter. We generated solid results across revenue, adjusted EBITDA and margin, cash flow, and EPS for Q3 combined.

These wins give us confidence in our ability to generate new logo and upsell cross sell revenue and are encouraging sign of our sustained go to market momentum since closing the Sterling acquisition, one year ago.

Speaker #2: Upsell , cross-sell and new logo rates continued to perform in line with our long term growth algorithm . Targets . Retention improved to 97% and increase from 96% in Q2 , demonstrating the success of our customer centric approach and that our best of breed technology and deep vertical expertise are resonating with the market .

Additionally, we are encouraged by the strength of our late stage pipeline with many large potential new contracts in the works, including several that are incorporating our digital identity product for the first time.

Looking at our verticals in the third quarter, our balanced and resilient vertical strategy supported our performance with nearly all of our verticals seeing revenue growth in the quarter on a pro forma year over year basis.

Speaker #2: We are pleased to share that we recently signed an exclusive five year contract renewal with a top customer that is expected to generate over $100 million in total revenues , of which a significant portion is guaranteed through minimum annual commitments .

Scott Staples: Looking at our verticals in Q3, our balanced and resilient vertical strategy supported our performance, with nearly all of our verticals seeing revenue growth in the quarter on a pro forma year-over-year basis. We saw strength in retail and e-commerce driven by upsell, cross-sell, and fueled by a good start to the holiday season. Transportation and logistics also grew, driven by our upsell, cross-sell initiatives, with particular demand from last mile and home delivery customers. In addition to serving onboarding needs for new hires within transportation, our broad range of solutions also supports our customers' ongoing compliance requirements, enhancing our results with balance and consistency across the solutions we provide. Healthcare was slightly down, driven by uncertainty with Medicare and Medicaid funding, particularly with the nonprofit hospital networks. This was offset in part as healthcare staffing companies stepped in to fill the hiring needs.

We saw strength in retail and e-commerce, driven by upsell cross sell and fueled by a good start to the holiday season.

Speaker #2: Base revenue performance again improved sequentially , remaining just below neutral and consistent with our expectations in Q3 . Our large new logo win in healthcare went live and is the last of the three large wins we have discussed with you .

Transportation and logistics also grew driven by our upsell cross sell initiatives with particular demand from last mile and home delivery customers.

In addition to serving onboarding needs for new hires within transportation, our broad range of solution also supports our customers' ongoing compliance requirements enhancing our results with balance and consistency across the solutions we provide.

Speaker #2: On past earnings calls to do so . Combined with the two wins that went live last quarter , one in the retail gig economy and the other in international win in Australia , all are now live and generating revenue , providing solid momentum going into Q4 .

Health care was slightly down driven by uncertainty with Medicare and Medicaid funding, particularly particularly with the nonprofit hospital networks, but this was offset in part as health care staffing company stepped in to fill the hiring needs.

Speaker #2: We are experiencing tremendous success with our go to market teams as further supported by our 17 enterprise bookings in the third quarter and 75 in the last 12 months .

We remain optimistic about the long term industry dynamics and fundamentals in health care as the U S population ages and requires more health care services.

Scott Staples: We remain optimistic about the long-term industry dynamics and fundamentals in healthcare as the US population ages and requires more healthcare services. Our other verticals, including general staffing, manufacturing and industrials, business services, and financial services, showed positive growth in Q3, partially powered by the success in our new logo and upsell, cross-sell programs. October order volumes show similar directional trends to what we saw in Q3 continuing. In international, for the 6th quarter in a row, we achieved year-over-year revenue growth with the UK as a bright spot, and also improving trends in APAC. Looking at the macro environment, we are still seeing a trend where hiring is remaining consistently flat. Macro uncertainty as well as policy changes, including the recent government shutdown, immigration, tariffs, and tax policy, have resulted in many of our customers remaining in a wait-and-see posture as it relates to their hiring plans.

Speaker #2: Each with $500,000 or more of expected annual contract value . These wins give us confidence in our ability to generate new logo and upsell , cross-sell revenue , and are encouraging sign of our sustained go to market momentum .

Our other verticals, including general staffing manufacturing and industrials business services and financial services showed positive growth in Q3.

Speaker #2: Since closing the sterling acquisition one year ago . Additionally , we are encouraged by the strength of our late stage pipeline with many large potential new contracts in the works , including several that are incorporating our digital identity product .

Partially powered by the success in our new logo and upsell cross sell programs.

October order volumes show similar directional trends to what we saw in Q3 continuing.

Speaker #2: For the first time . Looking at our verticals in the third quarter , our balanced and resilient vertical strategy supported our performance with nearly all of our verticals .

In international for the sixth quarter in a row, we achieved year over year revenue growth with the UK as a bright spot and also improving trends in APAC.

Speaker #2: Seeing revenue growth in the quarter on a pro forma year over year basis . We saw strength in retail and e-commerce , driven by upsell , cross-sell and fueled by a good start to the holiday season .

Looking at the macro environment, we are still seeing a trend where hiring is remaining consistently flat.

Macro uncertainty as well as policy changes, including the recent government shutdown immigration tariffs and tax policy have resulted in many of our customers remaining in a wait and see posture as it relates to their hiring plans. However, as you can see from our results our customers are still hiring at consistent levels.

Speaker #2: Transportation and logistics also grew , driven by our upsell , cross-sell initiatives with particular demand from last mile and home delivery customers . In addition to serving onboarding needs for new hires within transportation .

Scott Staples: However, as you can see from our results, our customers are still hiring at consistent levels. Our expectation for Q4 and likely into 2026 is for base growth to remain slightly negative as the overall labor market conditions persist. We continue to be confident in our ability to deliver overall revenue growth through upsell, cross-sell, and new logos. Our enterprise customers, diverse vertical mix, global reach, mix of hourly and salaried-focused customers, and diligent focus on controlling the controllables make our business resilient and able to perform well across a variety of macroeconomic scenarios. With regards to the impact of the government shutdown, our view is that the hiring markets have remained stable and active, with our core verticals continuing to perform well. The absence of BLS jobs and employment data has not impacted our ability to run our business.

Speaker #2: Our broad range of solutions also supports our customers ongoing compliance requirements , enhancing our results with balance and consistency across the solutions we provide .

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Our expectation for the fourth quarter and likely into 2026 is for base growth to remain slightly negative as the overall labor market conditions persist we.

Speaker #2: Healthcare was slightly down , driven by uncertainty with Medicare and Medicaid funding , particularly particularly with the nonprofit hospital networks . But this was offset in part as healthcare staffing companies stepped in to fill the hiring needs .

We continue to be confident in our ability to deliver overall revenue growth through upsell cross sell and new logos.

Our enterprise customers' diverse vertical mix global reach mix of hourly and salaried focused customers and diligent focus on controlling the controllable.

Speaker #2: We remain optimistic about the long term industry dynamics and fundamentals in healthcare as the US population ages and requires more healthcare services . Our other verticals , including general staffing , manufacturing and industrials , business services and financial services , showed positive growth in Q3 , partially powered by the success in our new logo and upsell .

Our business resilient and able to perform well across a variety of macroeconomic scenarios.

With regards to the impact of the government shutdown. Our view is that the hiring markets have remained stable and active with our core verticals continued to perform well.

Absence of BLS jobs, and employment data has not impact.

Speaker #2: Cross-sell programs . October order volumes show similar directional trends to what we saw in Q3 . Continuing in international for the sixth quarter in a row , we achieved year over year revenue growth with the UK as a bright spot and also improving trends in APAC .

<unk> run our business.

I want to take a few minutes to touch on AI as potential impact on our business building upon what we shared during our May Investor day.

Scott Staples: I want to take a few minutes to touch on AI's potential impact on our business, building upon what we shared during our May Investor Day. We are taking a proactive and strategic approach to understanding both the benefits and the risks of AI, and we are optimizing our long-term strategy based on the future of work. We recognize the pace at which AI is evolving and can see how it is currently impacting, and how some are expecting it to impact, the way certain types of jobs and labor are performed. Of note, the World Economic Forum's 2025 Future of Jobs Report predicts net positive growth through 2030, even after accounting for the impacts of AI.

We are taking a proactive and strategic approach to understanding both the benefits and the risks of AI and we are optimizing our long term strategy based on the future of work.

Speaker #2: Looking at the macro environment , we are still seeing a trend where hiring is remaining consistently flat . Macro uncertainty , as well as policy changes , including the recent government shutdown , immigration tariffs and tax policy have resulted in many of our customers remaining in a wait and see posture as it relates to their hiring plans .

We recognize the pace at which AI is evolving and can see how it is currently impacting and how some are expecting it to impact the way certain types of jobs and labor are performed.

Note.

The World Economic Forum's 2025 future of jobs report.

<unk> net positive growth through 2030, even after accounting for the impacts of AI, specifically, the WEX notes that while AI and automation are leading factors expected to displace an estimated 92 million jobs. These technologies and other market conditions conditions are.

Speaker #2: However , as you can see from our results , our customers are still hiring at consistent levels . Our expectation for the fourth quarter and likely into 2026 , is for base growth to remain slightly negative as the overall labor market conditions persist .

Scott Staples: Specifically, the WEF notes that while AI and automation are leading factors expected to displace an estimated 92 million jobs, these technologies and other market conditions are also expected to create 170 million new roles as companies and economies adopt to technological change, resulting in an expected global increase of 78 million jobs over the next 5 years. Again, we are confident that our diversified mix of verticals, customer segments, and geographies provides a meaningful degree of resiliency to AI impacts and will allow us to capitalize on the future growth opportunities. We are also strategically reviewing where and how we invest in terms of our products and verticals to ensure we are well-positioned to lead in a world increasingly influenced by AI, with a focus on continuing to generate long-term shareholder value.

Speaker #2: We continue to be confident in our ability to deliver overall revenue growth through upsell , cross-sell and new logos . Our enterprise customers diverse vertical mix , global reach , mix of hourly and salaried focused customers , and diligent focus on controlling the .

Also expected to create a 170 million new roles as companies and economies adopt the technology technological change.

<unk> in an expected global increase of 78 million jobs over the next five years.

Again, we are confident that our diversified mix of verticals customer segments and geographies provides a meaningful degree of resiliency to AI impacts and will allow us to capitalize on the future growth opportunities.

We are also strategically reviewing where and how we invest in terms of our products and verticals to ensure we are well positioned to lead in a world increasingly influenced by AI.

With a focus on continuing to generate long term shareholder value. For example, we're building tools such as our digital identity product, which enables our customers to address the increasing dangers of AI driven identity fraud at.

Scott Staples: For example, we are building tools such as our digital identity product, which enables our customers to address the increasing dangers of AI-driven identity fraud. At the same time, we are leveraging AI internally to enhance quality and customer experience. As we like to say, we are building good AI to fight bad AI. Additionally, I want to address some of the recent news headlines on corporate headcount reductions as companies claim to gain efficiencies from AI. In some instances, the news you read happens to relate to customers of ours, and what we have observed is that while those companies are reportedly making job cuts motivated by AI, we are seeing stable, if not growing, overall screening volumes from them.

At the same time, we are leveraging AI internally to enhance quality and customer experience as.

As we like to say we are building good AI to fight bad that AI.

Additionally, I want to address some of the recent news headlines on corporate head count reductions as companies claimed to gain efficiencies from AI and.

In some instances the news you read happens to relate to customers of ours and what we have observed is that while those companies are reportedly making job cuts motivated by AI. We are seeing stable if not growing overall screening volumes from them.

This is because many of these news, making reductions are an administrative type roles, which have a lesser impact on our business is typically a majority of our screening volume comes from normal churn and core hiring in our customers' operations.

Scott Staples: This is because many of these news-making reductions are in administrative-type roles, which have a lesser impact on our business, as typically a majority of our screening volume comes from normal churn and core hiring in our customers' operations. Additionally, as customers reinvest in their businesses to build out their internal AI and other capabilities, they should also be driving screening demand, as they will require roles to manage these changes. This sentiment is further supported by feedback directly from our customers who have told us that while they are currently investing in and leveraging AI in their businesses, they do not expect to meaningfully change their approach to core hiring over the next several years. Now, turning to slide 6. On 31 October, we were thrilled to celebrate the 1-year anniversary of the closing on our Sterling acquisition.

Additionally, as customers and reinvest in their businesses to build out their internal AI and other capabilities.

They should also be driving screening demand as they will require roles to manage these changes. This sentiment is further supported by feedback directly from our customers who have told us that while they are currently investing in and leveraging AI in their businesses. They do not expect to meaningfully change their approach to core hiring over the next several.

Yes.

Now turning to slide six on.

On October 31, we were thrilled to celebrate the one year anniversary of the closing on our Sterling acquisition.

Over the past year, we have made significant progress on our integration of this strategic acquisition, which has been outperforming our expectations on customer retention synergy capture and realization cultural alignment and complementary technologies and products.

Scott Staples: Over the past year, we have made significant progress on our integration of this strategic acquisition, which has been outperforming our expectations on customer retention, synergy capture and realization, cultural alignment, and complementary technologies and products. Importantly, we have delivered a very seamless, non-disruptive customer experience throughout the integration process. This has enabled us to maintain excellent customer satisfaction, as evidenced by our high retention levels and the feedback we are receiving from customers. We have also continued to deepen our customer relationships through our growing Collaborate International User Conference series, which reflects our expansive global footprint. In 2025, we've hosted events across the US, India, Singapore, and EMEA, with upcoming user conferences in Hong Kong and Australia.

Importantly, we have delivered a very seamless non disruptive customer experience throughout the integration process. This has enabled us to maintain excellent customer satisfaction as evidenced by our high retention levels and the feedback we're receiving from customers.

We have also continued to deepen our customer relationships through our growing collaborate international user conference series, which reflects our expansive global footprint.

In 2025, we have hosted events across the U S, India, Singapore, and EMEA with upcoming user conferences in Hong Kong and Australia.

These events provide us with direct insight into our customers' needs and emerging industry risks showcase our subject matter expertise uncover upsell and cross sell opportunities and helps cement our position as a category leader.

Scott Staples: These events provide us with direct insight into our customers' needs and emerging industry risks, showcase our subject matter expertise, uncover upsell and cross-sell opportunities, and help cement our position as a category leader. Recently, many of our European customers joined us at our London Collaborate to discuss key topics such as identity fraud, AI-driven screening, and global compliance. The strong turnout, high-value content, and customer engagement underscore the relevance of our solutions and the trust we are building across markets. Feedback confirms that our customers are looking to us for guidance as they plan for 2026. We're proud to be a strategic partner in helping them navigate evolving workforce risk. Our backend automation strategy has also been a key driver of operational efficiency throughout the integration process.

Recently, many of our European customers joined Us at our London collaborate to discuss key topics such as identity fraud.

AI, driven screening and global compliance the strong turnout high value content and customer engagement underscore the relevance of our solutions and the trust we are building across markets feed.

Feedback confirms that our customers are looking to us for guidance as they plan for 2026, and we're proud to be a strategic partner and helping them navigate evolving workforce risks.

Our backend automation strategy has also been a key driver of operational efficiency throughout the integration process by consolidating fulfillment into a single global engine, we are leveraging years of investment engineering and development and robotic process automation API.

Scott Staples: By consolidating fulfillment into a single global engine, we are leveraging years of investment, engineering, and development in robotic process automation, APIs, and AI. We have kept two front-end platforms for customer continuity, but behind the scenes, we have been able to streamline workflows, cut redundancies, and drive efficiency. These efficiencies not only enhance speed and customer satisfaction but are also expected to create meaningful margin improvement as we grow. Additionally, since announcing the Sterling acquisition, we have increased our synergy target from our original $50 million plus to a range of $65 to 80 million. We have also made solid progress on deleveraging our balance sheet as we work towards our target net level range of two to three times. Steven will provide additional details shortly on both our synergy progress and deleveraging. Turning to slide seven.

AI.

We have kept two front end platforms for customer continuity, but behind the scenes, we have been able to streamline workflows cut redundancies and drive efficiency. These efficiencies not only enhanced speed and customer satisfaction, but are also expected to create meaningful margin improvement as we grow.

Additionally, since announcing the Sterling acquisition, we have increased our synergy target from our original $50 million plus to a range of $65 million to $80 million we.

We have also made solid progress on deleveraging our balance sheet as we work towards our target net level range of two to three times Steve.

Steven will provide additional details shortly on both our synergy progress and deleveraging.

Turning to slide seven.

Throughout the integration process, we have been focused on enhancing our customer value proposition to unlock new logo upsell and cross sell opportunities, while continuing to drive innovation and foster the high performance culture, we are known for.

Scott Staples: Throughout the integration process, we have been focused on enhancing our customer value proposition to unlock new logo, upsell, and cross-sell opportunities while continuing to drive innovation and foster the high-performance culture we are known for. We are consistently leveraging our best-of-breed approach to provide optimal solutions and technology to solve our customers' challenges. Last quarter, we discussed how the expansion of our award-winning Click, Chat, Call customer care solution and our high-margin First Advantage Work Opportunity Tax Credit product have benefited our customers. We have continued this progress, achieving a milestone in Q3 with the increased usage of the millions of records in our proprietary National Criminal Record File database across both platforms, something we have been rolling out since Q1 of this year.

We are consistently leveraging our best of breed approach to provide optimal solutions and technology to solve our customers' challenges.

Last quarter, we discussed how the expansion of our award winning click chat call customer care solution in our high margin first advantage work opportunity tax credit product has benefited our customers we.

We have continued this progress achieving a milestone in Q3 with the increased usage of the millions of records in our proprietary national Criminal records by our database across both platforms.

Operator: 2025 Earnings Conference call and webcast. Hosting the call today from First Advantage is Stephanie Gorman, Vice President of Investor Relations. At this time, all participants have been placed in listen-only mode to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, please press Star 1 on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing Star 2. Lastly, if you should require operator assistance, please press Star 0. Please note today's event is being recorded. It is now my pleasure to turn the call over to Stephanie Gorman. You may begin.

Something we have been rolling out since Q1 of this year.

With our proprietary data and in house data science teams, we deliver faster insights and a superior experience for everyone from recruiters to HR teams to candidates.

Scott Staples: With our proprietary data and in-house data science teams, we deliver faster insights and a superior experience for everyone, from recruiters to HR teams to candidates. This powers our ability to reduce turnaround time while increasing the speed, coverage, and effectiveness of our criminal screenings, facilitating comprehensive and timely results for our customers. In October, we made available our criminal and motor vehicle records monitoring solutions to the entire customer base, offering another best-of-breed experience to all of our customers. We are also underway in leveraging our best-of-breed approach to enhance the user experience. Over the past 18 months, we have been rolling out a new applicant portal. Now, approximately half of our order volume on the First Advantage front end runs through this portal, with customer adoption continuing to grow.

This powers, our ability to reduce turnaround time, while increasing the speed coverage and effectiveness of our criminal screening facilitating comprehensive and timely results for our customers.

In October we made available our criminal and motor vehicle Records monitoring solutions to the entire customer base offering another best of breed experience to all of our customers.

Stephanie Gorman: Thank you, Sabrina. Good morning, everyone, and welcome to First Advantage's third quarter 2025 earnings conference call. In the investor section of our website, you will find the earnings press release and slide presentation to accompany today's discussion. This webcast is being recorded and will be available for replay on our investor relations website. Before we begin our prepared remarks, I would like to remind everyone that our discussion today will include forward-looking statements. Such forward-looking statements are not guarantees of future performance. Actual 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 2024 Form 10-K and our Form 10-Q for the third quarter of 2025 to be filed with the SEC.

We are also underway and leveraging our best of breed approach to enhance the user experience.

Over the past 18 months, we've been rolling out a new applicant portal now approximately half of our order volume on the first advantage front.

Front end runs through this portal with customer adoption continuing to grow this represents the most secure and user friendly experience we've ever built featuring device agnostic design for a seamless experience across devices customer civic specific branding for familiar and consistent look.

Scott Staples: This represents the most secure and user-friendly experience we've ever built, featuring device-agnostic design for a seamless experience across devices, customer-specific branding for a familiar and consistent look, and AI-powered features that continuously learn from the candidate interactions to deliver a best-in-class rage-click-free experience. In November, we are extending the same modern look and feel to the Sterling front end, bringing the benefits to even more customers. This initiative reflects our commitment to delivering an outstanding user experience backed by rigorous data, feedback, sentiment analysis, and continuous improvement. It's a win for our customers and their candidates, and a key differentiator for First Advantage. On top of this, we are continuing to see solid momentum and interest in our digital identity products.

And AP and AI powered features that continuously learn from the Canada interactions deliver a best in class rage click free experience.

In November we are extending the same modern look and feel to the Sterling front and bringing the benefits to even more customers. This initiative reflects our commitment to delivering an outstanding user experience backed by rigorous data feedback sentiment analysis and continuous improvement.

Stephanie Gorman: 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. Throughout this conference call, we will also present and discuss non-GAAP financial measures. Reconciliations of our non-GAAP financial measures to their most directly comparable GAAP financial measures, to the extent available without unreasonable effort, appear in today's earnings press release and presentation, which are available on our investor relations websites. To facilitate comparability, we will also discuss pro forma combined company results consisting of First Advantage and Sterling Check Corp. historical results and certain pro forma adjustments as if the acquisition of Sterling had occurred on 1 January 2023. The pro forma information does not constitute Article 11 pro forma information. I'm joined on our call today by Scott Staples, our Chief Executive Officer, and Stephen Marks, our Chief Financial Officer.

It's a win for our customers and their candidates.

And a key differentiator for first advantage.

On top of this we are continuing to see solid momentum and interest in our digital identity products.

Negative use of AI and other technologies are creating new risks for companies and organizations and are driving rapid evolution in the digital identity space.

Scott Staples: Negative use of AI and other technologies are creating new risks for companies and organizations, and are driving rapid evolution in the digital identity space. Knowing who you're hiring and confirming who they actually are is critical. Our digital identity solution is fully linked in the hiring life cycle, with some customers using it multiple times through the recruiting, screening, and onboarding process, which is creating a competitive advantage for First Advantage. As an early market leader with digital identity solutions, we are able to deepen our strategic dialogue with customers, strengthening our relationships and stickiness of our products. We are highly focused on this attractive opportunity, which has a total addressable market of over $10 billion and an expected growth rate in the mid to high teens.

Knowing who you are hiring and confirming who they actually are is critical our digital identity solution is fully linked in the hiring lifecycle with some customers using it multiple times through the recruiting screening and Onboarding process, which is which is creating a competitive advantage for first advantage.

As an early market leader with digital DNA solutions, we are able to deepen our strategic dialogue with customers strengthening our relationships and stickiness of our products.

Stephanie Gorman: After our prepared remarks, we will take your questions. I will now hand the call over to Scott.

Scott Staples: Thank you, Stephanie, and good morning, everyone. Thank you for joining our call. We have four key messages for today. First, we delivered another quarter of profitable growth, meeting and exceeding our expectations with revenues up approximately 4% year over year on a pro forma basis and achieving adjusted EBITDA margins of 29%. Our performance was driven by continued go-to-market success in new logo and upsell cross-sell. This demonstrates our ability to generate solid results amid the current macroeconomic environment in which hiring growth has been consistently flat, while maintaining our relentless focus on cost discipline. Second, just last week, we celebrated the one-year anniversary of closing on our Sterling acquisition. I am extremely pleased with the performance of our entire team as our integration is progressing ahead of schedule, and we are delivering strategic and financial benefits as promised.

We are highly focused on this attractive opportunity, which is a total addressable market of over $10 billion and an expected growth rate in the mid to high teens.

Our digital identity products.

Scott Staples: Our digital identity products is continuing to build a strong pipeline as customers navigate the early adoption and pilot phase. Digital identity is a powerful competitive differentiator for First Advantage and indicative of the direction in which our industry is growing. Overall, our customers continue to be excited about the benefits of our best-of-breed platforms, products, data, and AI-enabled technologies. This is evident by our strong customer retention and consistent new logo and upsell, cross-sell performance. With that, I will now turn the call over to Steven.

Is.

<unk> is continuing to build a strong pipeline as customers navigate the early adoption and pilot phase.

Digital identity is a powerful competitive differentiator for first advantage and are indicative of the direction in which our industry growth is growing.

Front end runs through this portal with customer adoption, continuing to grow. This represents the most secure and user-friendly experience. We've ever built featuring device. Agnostic design for a seamless experience across devices. Customer specific specific branding for familiar and consistent look and AP and AI powered features that continuously learn from the candidate interactions deliver a best-in-class, rage clickfree experience.

Overall, our customers continue to be excited about the benefits of our best of breed platforms products data and AI enabled technologies. This is evidenced by our strong customer retention and consistent new logo and upsell cross sell performance.

In November, we are extending the same modern look. And feel to the Sterling front end, bringing the benefits to even more customers. This initiative, reflects our commitment to delivering in its outstanding user experience, backed by rigorous data feedback, sentiment analysis, and continuous Improvement.

With that I will now turn the call over to Steven.

It's a win for our customers and their candidates.

And a key differentiator for First Advantage.

Thank you Scott and good morning, everyone. Today, I will provide color on our third quarter results synergy progress deleveraging trends and our narrowed 2025 guidance I'll start with third quarter results on slide nine.

Steven Marks: Thank you, Scott. Good morning, everyone. Today, I will provide color on our Q3 results, synergy progress, deleveraging trends, and our narrowed 2025 guidance. I'll start with Q3 results on slide 9. Our Q3 revenues were $409 million, up 3.8% versus last year on a pro forma basis, with our year-over-year revenue growth rate increasing sequentially from Q2 as expected. Our go-to-market success was in line with our long-term growth algorithm targets as the combined contribution of new logo and upsell and cross-sell revenues delivered 9% growth in the quarter, and our retention rate reached 97%. The trends in our base performance continued to moderate on par with how we had forecast the quarter, with base remaining negative on a year-over-year basis.

On top of this, We are continuing to see solid momentum and interest in our digital identity products.

Scott Staples: Third, we are continuing to execute on our FA 5.0 strategy, actioning our best-of-breed product and platform approach to accelerate growth through new logos, upsell, cross-sell, and improve client retention. Today, we will highlight how our technologies and products are enhancing our value proposition and solving customers' critical needs. Fourth, today, we are narrowing our full year 2025 guidance ranges with refined midpoints at or above our original guidance midpoints. Now, turning to slide five and a closer look at our performance in the third quarter, we generated solid results across revenue, adjusted EBITDA and margin, cash flow, and EPS. For Q3, combined upsell, cross-sell, and new logo rates continued to perform in line with our long-term growth algorithm targets. Retention improved to 97%.

Negative use of AI and other Technologies are creating new risks for companies rapid evolution in the digital identity space.

Our third quarter revenues were $409 million.

Knowing who your hiring and confirming who they actually are is critical.

Three 8% versus last year on a pro forma basis with our year over year revenue growth rate increasing sequentially from Q2 as expected.

Our go to market success was in line with our long term growth algorithm targets as the combined contribution of new logo and upsell and cross sell revenues delivered 9% growth in the quarter and our retention rate reached 97%.

Our digital identity solution is fully linked in the hiring life cycle, with some customers using it multiple times through the recruiting, screening, and onboarding process.

Which is a, which is creating a competitive Advantage for First Advantage.

As an early market, leader with digital identity Solutions, we are able to deepen our strategic dialogue with customers, strengthening our relationships and stickiness of our products.

The trends at our base performance continued to moderate on par with how we had forecast a quarter with base remaining negative on a year over year basis. Our solid results were supported by consistent execution on our integration and synergy plan, which remain ahead of schedule.

We are highly focused on these this attractive opportunity, which has a total addressable Market of over 10 billion dollars and an expected growth rate in the mid to high teens.

Steven Marks: Our solid results were supported by consistent execution on our integration and synergy plan, which remain ahead of schedule. Adjusted EBITDA for Q3 was $118.5 million. Our adjusted EBITDA margin of 29% exceeded our expectations, representing an improvement of 130 basis points versus the prior year on a pro forma basis, despite being slightly lower sequentially from Q2 due to mix. Our results were enabled by our continued focus on accelerating synergies, our disciplined approach to cost management, and the scalable nature of our business. As part of the integration process, we are applying best-of-breed fulfillment execution, which is helping improve the combined company's operating margins in line with our historical expectations of the business. Adjusted diluted EPS was $0.30, a 15.4% increase year over year, and also ahead of our expectations.

Our digital identity products.

Adjusted EBITDA for the third quarter was $118 5 million.

Um, is continuing to build a strong pipeline as customers, navigate the early adoption and pilot phase.

Our adjusted EBITDA margin of 29% exceeded our expectations, representing an improvement of 130 basis points versus the prior year on a pro forma basis, despite being slightly lower sequentially from Q2 due to mix.

Scott Staples: An increase from 96% in Q2, demonstrating the success of our customer-centric approach, and that our best-of-breed technology and deep vertical expertise are resonating with the market. We are pleased to share that we recently signed an exclusive five-year contract renewal with a top customer that is expected to generate over $100 million in total revenues, of which a significant portion is guaranteed through minimum annual commitments. Base revenue performance again improved sequentially, remaining just below neutral, and consistent with our expectations. In Q3, our large new logo win in healthcare went live and is the last of the three large wins we have discussed with you on past earnings calls to do so.

Is growing.

Our results were enabled by our continued focus on accelerating synergies our disciplined approach to cost management and the scalable nature of our business as part of the integration process. We are applying best of breed fulfillment execution, which is helping improve the combined company's operating margins in line with.

Overall, our customers continue to be excited about the benefits of our best of breed platforms, products, data, and AI enabled Technologies. This is evident by our strong customer retention and consistent, new logo, and upsell cross-sell performance.

With that, I will now turn the call over to Stephen.

Our historical expectations of the business.

Thank you, Scott, and good morning everyone. Today, I will provide color on our third quarter results, Synergy progress, deleveraging Trends and our narrow 2025 guidance.

Adjusted diluted EPS was <unk> 30.

I'll start with third quarter results. On slide 9.

A 15, 4% increase year over year and also ahead of our expectations.

The benefits of our greater scale expense and capital management and lower interest expense as a result of our debt repricing in voluntary debt payments to date has supported our per share earnings.

Steven Marks: The benefits of our greater scale, expense and capital management, and lower interest expense as a result of our debt repricing and voluntary debt payments to date have supported our per-share earnings. These have more than offset the impact of the incremental interest on the transaction financing and the dilutive impact of the new shares issued for the Sterling acquisition. On slide 10, you can see how we are making great progress on our synergy program. This quarter, we crossed the original $50 million threshold of action synergies, now having actioned $52 million and exceeding our initial total synergy program goal within only one year. We benefited from the realization of $12 million of synergies in Q3, bringing our in-year realization to $30 million.

Scott Staples: Combined with the two wins that went live last quarter, one in the retail gig economy and the other an international win in Australia, all are now live and generating revenue, providing solid momentum going into Q4. We are experiencing tremendous success with our go-to-market teams, as further supported by our 17 enterprise bookings in the third quarter and 75 in the last 12 months, each with $500,000 or more of expected annual contract value. These wins give us confidence in our ability to generate new logo and upsell cross-sell revenue, and are an encouraging sign of our sustained go-to-market momentum since closing the Sterling acquisition one year ago. Additionally, we are encouraged by the strength of our late-stage pipeline, with many large potential new contracts in the works, including several that are incorporating our digital identity product for the first time.

Our third quarter revenues were 409 million up 3.8% versus last year on a pro forma basis with our year-over-year. Revenue growth rate, increasing sequentially from Q2 as expected.

These have more than offset the impact of the incremental interest on the transaction financing and the dilutive impact of the new shares issued for the Sterling acquisition.

Our go to market success, was in line with our long-term growth algorithm targets as the combined contribution of new logo and upselling.

revenues delivered 9% growth in the quarter and our retention rate, reached 97%

On Slide 10, you can see how we're making great progress on our synergy program.

This quarter, we crossed the original $50 million threshold of action synergies now, having actions and $52 million and exceeding our initial total synergy program goal within only one year, we benefited benefited from the realization of $12 million of synergies in the third quarter, bringing our in.

The, the trends in our base performance continued to moderate on par with how we had forecast, the quarter with base remaining negative on a year-over-year basis.

Our solid results are supported by consistent execution, on our integration and Synergy plans, which remain ahead of schedule.

Adjusted eetop for the third quarter was 118.5 Million.

Year realization to $30 million.

We remain committed to and confident that we will achieve our goal of $65 million to $80 million of action synergies within two years and are pleased to see the consistent success of our integration and synergy execution.

Steven Marks: We remain committed to and confident that we will achieve our goal of $65 to 80 million of action synergies within two years and are pleased to see the consistent success of our integration and synergy execution. Looking forward, we are focused on scaling, automating, and applying AI as we continue to execute on our integration priorities. Moving to slide 11, you can see our historical revenue growth algorithm results with combined company data beginning in 2025. As previously mentioned, in Q3, our results were driven by strong upsell, cross-sell, as well as new logos, supported by consistent solid retention. Base results came in as expected with sequential improvement from Q2 despite remaining negative for Q3. Now turning to cash flow, net leverage, and our debt paydown progress on slide 12.

Our adjusted Eva do margin of 29% exceeded. Our expectations representing an improvement of 130 basis points versus the prior year on a pro forma basis. Despite being slightly lower sequentially from Q2 due to mix.

Looking forward, we are focused on scaling automating and applying AI as we continue to execute on our <unk>.

Scott Staples: Looking at our verticals in the third quarter, our balanced and resilient vertical strategy supported our performance, with nearly all of our verticals seeing revenue growth in the quarter on a pro forma year-over-year basis. We saw strength in retail and e-commerce, driven by upsell, cross-sell, and fueled by a good start to the holiday season. Transportation and logistics also grew, driven by our upsell, cross-sell initiatives, with particular demand from last-mile and home delivery customers. In addition to serving onboarding needs for new hires within transportation, our broad range of solutions also supports our customers' ongoing compliance requirements, enhancing our results with balance and consistency across the solutions we provide. Healthcare was slightly down, driven by uncertainty with Medicare and Medicaid funding, particularly with the nonprofit hospital networks, but this was offset in part as healthcare staffing companies stepped in to fill the hiring needs.

Our integration priorities.

Moving to slide 11, you can see our historical revenue growth algorithm results with combined company data beginning in 2025.

As previously mentioned in the third quarter. Our results were driven by strong upsell cross sell as well as new logos supported by consistent solid retention base.

Our results were enabled by our continued focus on accelerating synergies. Our disciplined approach to cost management and the scalable nature of our business. As part of the integration process, we are applying best of brief fulfillment execution which is helping improve the combined companies operating margins in line with our historical expectations of the business.

Adjusted diluted EPS was $0.30, a 15.4% increase year-over-year and also ahead of our expectations.

<unk> results came in as expected with sequential improvement from Q2, despite remaining negative for Q for Q3.

Now turning to cash flow net leverage and our debt pay down progress on slide 12 during the quarter, we generated adjusted operating cash flow of nearly $81 million.

The benefits of our greater scale, expense and capital management, and lower interest expense. As a result of our debt repricing and voluntary debt payments to date, we have supported our per share earnings.

Steven Marks: During the quarter, we generated adjusted operating cash flows of nearly $81 million, an increase of $35 million or 78% on a year-over-year basis. This was driven by the larger scale of our business, our tight management of our working capital, including collections on receivables, the benefit of the OBBBA, which has reduced our required cash tax payment, and our overall focus on cash flow. Our cash balance at 30 September 2025 was $217 million. With this ample liquidity and cash flow, subsequent to the end of the quarter in November, we made a $25 million voluntary repayment on our debt principal, bringing our total year-to-date principal repayments to over $70 million, most of which has been voluntary using excess cash flow.

these have more than offset the impact and financing and the dilutive impact of the new shares issued for the Sterling acquisition,

An increase of $35 million or 78% on a year over year basis. This was driven by the larger scale of our business our tight management of our working capital including collections on receivables the benefit of the BBVA, which has reduced our required cash.

Scott Staples: We remain optimistic about the long-term industry dynamics and fundamentals in healthcare as the US population ages and requires more healthcare services. Our other verticals, including general staffing, manufacturing and industrials, business services, and financial services, showed positive growth in Q3, partially powered by the success in our new logo and upsell cross-sell programs. October order volumes show similar directional trends to what we saw in Q3 continuing. In international, for the sixth quarter in a row, we achieved year-over-year revenue growth, with the UK as a bright spot, and also improving trends in APAC. Looking at the macro environment, we are still seeing a trend where hiring is remaining consistently flat. Macro uncertainty, as well as policy changes, including the recent government shutdown, immigration, tariffs, and tax policy, have resulted in many of our customers remaining in a wait-and-see posture as it relates to their hiring plans.

On slide 10, you can see how we are making great progress on our Synergy program. This quarter, we crossed the original 50 million dollar threshold of action synergies. Now, having actions 52 million and exceeding. Our initial total Synergy program goal within only 1 year

Tax payments and our overall focus on cash flow or.

Our cash balance at September 32025 was $217 million.

We benefited benefited from the realization of 12 million dollars of synergies in the third quarter, bringing our in your realization to 30 million.

With ample liquidity and cash flow subsequent to the end of the quarter in November we made a $25 million voluntary repayment on our debt principal bringing our total year to date principal repayments to over $70 million, most of which has been voluntary using excess cash flow.

We remain committed to and confident that we will achieve our goal of 65 to 800 million of of action. Synergies within 2 years and are pleased to see the consistent success of our integration in Synergy execution.

Our synergize pro forma adjusted EBITDA net leverage ratio at quarter end was four two times and represents about a quarter of a turn decrease from a year ago. When we close the Sterling acquisition.

Steven Marks: Our synergized pro forma adjusted EBITDA net leverage ratio at quarter end was 4.2x and represents about a quarter of a turn decrease from a year ago when we closed the Sterling acquisition. We remain focused on reducing our net leverage towards approximately 3x synergized pro forma adjusted EBITDA within 24 months post-close, and our long-term net leverage target remains 2x to 3x. Moving to slide 13 in our updated 2025 guidance. As a reminder, year-over-year comparisons are on a pro forma basis to allow for easier comparability. Today, we are narrowing our full year 2025 guidance ranges with refined midpoints at or above the midpoints from our original guidance.

Looking forward. We are focused on scaling automating and applying AI as we continue to execute on our on our integration priorities.

Moving to slide 11, you can see our historical Revenue growth algorithm results with combined company data, beginning in 2025,

We remain focused on reducing our net leverage towards approximately three times centered value pro forma adjusted EBITDA within 24 months post closing and our long term net leverage target remains two to three times.

As previously mentioned in the third quarter, our results were driven by strong upsell cross cells, as well as new logos.

Supported by consistent.

Retention.

Moving to slide 13, and our updated 2025 guidance as a reminder year over year comparisons are on a pro forma basis to allow for easier comparability.

Scott Staples: However, as you can see from our results, our customers are still hiring at consistent levels. Our expectation for the fourth quarter and likely into 2026 is for base growth to remain slightly negative as the overall labor market conditions persist. We continue to be confident in our ability to deliver overall revenue growth through upsell, cross-sell, and new logos. Our enterprise customers, diverse vertical mix, global reach, mix of hourly and salaried-focused customers, and diligent focus on controlling the controllables make our business resilient and able to perform well across a variety of macroeconomic scenarios. With regards to the impact of the government shutdown, our view is that the hiring markets have remained stable and active, with our core verticals continuing to perform well. The absence of BLS jobs and employment data has not impacted our ability to run our business.

Came in as expected with sequential improvement from Q2 despite remaining negative for Q3 for Q3.

Now turning to cash flow, net leverage and our Debt Pay down progress on slide 12.

Today, we are narrowing our full year 2025 guidance range with refined midpoint at or above the mid point from our original guidance our.

Our year to date results as well as the momentum we have seen heading into the fourth quarter give us confidence in our revised guidance ranges with revenues now in the range of $1.535 billion to $1 billion $570 million.

During this quarter we generated adjusted operating cash. Flows of nearly 81 million. An increase of 35 million or 78% on a year-over-year basis.

Steven Marks: Our year-to-date results, as well as the momentum we have seen heading into Q4, give us confidence in our revised guidance ranges, with revenues now in the range of $1,535 million to 1,570 million. Supported by strong synergy execution and our continued focus on efficiently managing our business, we now expect to achieve full-year adjusted EBITDA margins of approximately 28%, a meaningful expansion from pro forma 2024. Looking at Q4 as implied in our updated full year guidance today, our revenue outlook for Q4 of around 6% year-over-year growth at the midpoint continues to assume a certain degree of macro stability while keeping in mind that our customers remain in a wait and see mode.

This was driven by the larger scale of our business, our tight management of our working capital, including collections on receivables.

The benefit of the obb.

Courted by strong synergy execution, and our continued focus on efficiently managing our business. We now expect to achieve full year adjusted EBITDA margins of approximately 28% and meaningful expansion from pro forma 2024.

Which has reduced our required cash, tax payments and our overall focus on cash flow.

In 17 million.

Looking at the fourth quarter as implied in our updated full year guidance today, our revenue outlook for Q4 of around 6% year over year growth at the midpoint continues to assume a certain degree of macro stability, while keeping in mind that our customers remain in a wait and see mode.

Scott Staples: I want to take a few minutes to touch on AI's potential impact on our business, building upon what we shared during our May Investor Day. We are taking a proactive and strategic approach to understanding both the benefits and the risks of AI, and we are optimizing our long-term strategy based on the future of work. We recognize the pace at which AI is evolving, and can see how it is currently impacting, and how some are expecting it to impact the way certain types of jobs and labor are performed. Of note, the World Economic Forum's 2025 Future of Jobs report predicts net positive growth through 2030, even after accounting for the impacts of AI.

With this ample liquidity and cash flow subsequent to the end of the quarter. In November, we made a 25 million voluntary repayment on our debt. Principal bringing our total year-to-date principal repayments to over 70 million dollars, most of which has been voluntary using excess cash flow

The impacts of increased tariffs and other policies remain key areas of uncertainty across the global economy, but our customers continue to hire at consisted of volumes we have.

Steven Marks: The impacts of increased tariffs and other policies remain key areas of uncertainty across the global economy, but our customers continue to hire at consistent volumes. We expect Q4 base growth to remain slightly negative, consistent with Q3, with this trend likely to continue into 2026. As Scott mentioned, we saw very consistent volumes in October, which aligns to our updated Q4 expectations. We anticipate continued productivity of combined upsell, cross-sell, and new logo growth consistent with, if not better than, historical trends. Additionally, the go lives of our recent large wins and robust new contract pipeline support our expectations for Q4. We also expect customer retention to remain in line with our historical performance of at least 96%. In Q4, we expect adjusted EBITDA margins to expand versus the prior year period by more than 100 basis points.

Our synergize pro-forma adjusted eva.net. Leverage ratio at quarter end was 4.2 times and represents about a quarter of a turn. Decrease from a year ago when we closed the Sterling acquisition.

Expect Q4 base growth to remain slightly negative consistent with Q3 with this trend likely to continue into 2026.

As Scott mentioned, we saw very consistent volumes in October, which aligns to our updated Q4 expectations. We anticipate continued productivity of combined upsell cross sell and new logo growth consistent with if not better than historical trends.

We remained focused on reducing our net leverage towards approximately 3 times synergized, proforma, adjusted Eva, within 24 months post-close and our long-term. Net leverage Target remains 2 to 3 times.

Moving to slide 13 in our updated 2025 guidance.

Scott Staples: Specifically, the WEF notes that while AI and automation are leading factors expected to displace an estimated 92 million jobs, these technologies and other market conditions are also expected to create 170 million new roles as companies and economies adapt to technological change, resulting in an expected global increase of 78 million jobs over the next five years. We are confident that our diversified mix of verticals, customer segments, and geographies provides a meaningful degree of resiliency to AI impacts and will allow us to capitalize on the future growth opportunities. We are also strategically reviewing where and how we invest in terms of our products and verticals to ensure we are well-positioned to lead in a world increasingly influenced by AI, with a focus on continuing to generate long-term shareholder value.

as a reminder year-over-year comparisons on a, or on a pro-forma basis to allow for easier comparability

Additionally, the go lives of our recent large wins and robust new contract pipeline support our expectations for the fourth quarter.

Today we are narrowing our full year 2025 guidance ranges with refined midpoints at or above the midpoint from our original guidance.

We also expect customer retention to remain in line with our historical performance of at least 96%.

In the fourth quarter, we expect adjusted EBITDA margins to expand versus the prior year period by more than 100 basis points.

Similar to the expansion, we saw in Q3 and and.

Steven Marks: This is similar to the expansion we saw in Q3 and results in Q4 adjusted EBITDA margins of approximately 28%. While this represents a small sequential decline from Q3 2025, it is in line with the historical trends in our business, reflecting the mix shifts driven by seasonally lower December revenues and some movements in verticals and some movements in volumes between our verticals and products. This year, we also anticipate the mix shifts we saw in Q3 towards products with relatively higher out-of-pocket fees will continue to impact adjusted EBITDA margins into Q4, though over time, we expect these impacts to normalize. Even with these trends in mind, we remain confident in our ability to drive year-over-year margin improvements in Q4. We anticipate that our adjusted diluted EPS growth momentum will continue as revenue ramps and synergies are realized.

And result in the fourth quarter adjusted EBITDA margin of approximately 28%.

While this represents a small sequential decline from Q3 2025. It is in line with the historical trends in our business, reflecting the mix shifts driven by seasonally lower December revenues and some movement in the verticals.

Our year-to-date results, as well as the momentum. We have seen heading into the fourth quarter. Give us confidence in our revised. Guidance ranges with revenues now in the range of 1 billion 535 million, to 1 billion 570 million supported by strong Synergy execution, and our continued focus on efficiently managing our business. We now expect to achieve full year adjusted, iPad time, margins of approximately 28% and meaningful expansion from proforma 2024.

And some of that movement and volumes between our verticals and products.

Scott Staples: For example, we are building tools such as our Digital Identity product, which enables our customers to address the increasing dangers of AI-driven identity fraud. At the same time, we are leveraging AI internally to enhance quality and customer experience. As we like to say, we are building good AI to fight bad AI. Additionally, I want to address some of the recent news headlines on corporate headcount reductions as companies claim to gain efficiencies from AI. In some instances, the news you read happens to relate to customers of ours. What we have observed is that while those companies are reportedly making job cuts motivated by AI, we are seeing stable, if not growing, overall screening volumes from them.

This year, we also anticipate the mix shifts we saw in Q3 towards products with relatively higher out of pocket fees will continue to impact adjusted EBITDA margins into Q4. So over time, we expect these impacts to normalize.

Looking at the fourth quarter as implied in our updated 4 year guidance. Today our Revenue outlook for Q4 at of around 6% year-over-year growth at the midpoint continues to assume a certain degree of macro stability. While keeping in mind that our customers remain in a weight and C mode,

Even with these trends in mind, we remain confident in our ability to drive year over year margin improvement in Q4.

We anticipate that our adjusted diluted EPS growth momentum will continue as revenue ramps and synergies are realized.

The impacts of increased tariffs and other or policies remain key areas of uncertainty across the global economy. But our customers continue to hire at consistent volumes, we expect Q4 base growth to remain slightly negative consistent with Q3 with this trend, likely to continue into 2026.

Fight the mixed trend previously mentioned, we expect that quarterly adjusted diluted EPS will remain in the mid 20 range.

Steven Marks: Despite the mixed trends previously mentioned, we expect that quarterly adjusted diluted EPS will remain in the mid $0.20 range in Q4, representing meaningful expansion on a year-over-year basis. On a similar note, we now anticipate free cash flow for the year of $110 to 120 million. This represents a notable increase from our previous commentary, as we have been able to generate incremental cash flow from better working capital management and have successfully managed our integration-related costs. As previously noted, the passing of the OBBA tax law in July doesn't notably impact our effective tax rate. However, we will be able to utilize certain provisions within the new law to materially reduce our 2025 required cash tax payments.

As Scott mentioned, we saw very consistent volumes in October which aligned to our updated Q4 expectations. We anticipate continued productivity of combined upsell cross.

In the final quarter of the year, representing meaningful expansion on a year over year basis.

And new logo growth is consistent with, if not better than, historical trends.

On a similar note we now anticipate free cash flow for the year of $110 million to $120 million. This represents a notable increase from our previous commentary as we have been able to generate incremental cash flow from better working capital management and have successfully managed our integration related cost.

Scott Staples: This is because many of these news-making reductions are in administrative-type roles, which have a lesser impact on our business, as typically a majority of our screening volume comes from normal churn and core hiring in our customers' operations. Additionally, as customers reinvest in their businesses to build out their internal AI and other capabilities, they should also be driving screening demand, as they will require roles to manage these changes. This sentiment is further supported by feedback directly from our customers, who have told us that while they are currently investing in and leveraging AI in their businesses, they do not expect to meaningfully change their approach to core hiring over the next several years. Now, turning to slide six. On 31 October 2023, we were thrilled to celebrate the one-year anniversary of the closing on our Sterling acquisition.

Additionally, the go-lives of our recent large, wind-in-robust, new contract pipeline support our expectations for the fourth quarter.

We are. We also expect customer retention to remain in line with our historical performance of at least 96%.

As previously noted the passing of the O BBB a tax law in July doesn't notably impact our effective tax rate. However, we will be you will be able to utilize certain provisions within the new law to materially reduce our 2025 required cash tax payments.

In the fourth quarter, we expect adjusted Eva down margins to expand versus the prior year period by more than 100 basis points, this is similar to the expansion. We saw in Q3 and and results in fourth quarter, adjusted, Evas on margins of approximately 28%

We have provided a full chart in the appendix to the earnings presentation with FX Capex interest and other modeling assumptions. Additionally.

Steven Marks: We have provided a full chart in the appendix to the earnings presentation with FX, CapEx, interest, and other modeling assumptions. We do not expect the government shutdown to materially impact our results. While the shutdown itself has affected some operational items, such as the government-run E-Verify platform, resulting in some delayed I-9 verifications, we expect any delays in processing I-9s will be resolved in the quarter as soon as the government shutdown concludes, and this is a very small component of our business. Overall, taking a step back, we are pleased with our refined 2025 guidance ranges we are providing today, particularly amid our ever-changing world.

Additionally, we do not expect the government shutdown to materially impact our results while the shutdown itself has affected some operational items such as the government run E verify platform, resulting in some delayed <unk> verification, we expect any delays in processing <unk> there'll be resolved in the quarter as soon as the government shut.

While this represents a small sequential decline from Q3 2025, it is in line with a historical Trends, in our business, reflecting the mixed shifts driven by seasonally, lower December revenues, and sub movements in verticals and and some movements and volumes between our verticals and products.

Scott Staples: Over the past year, we have made significant progress on our integration of this strategic acquisition, which has been outperforming our expectations on customer retention, synergy capture and realization, cultural alignment, and complementary technologies and products. Importantly, we have delivered a very seamless, non-disruptive customer experience throughout the integration process. This has enabled us to maintain excellent customer satisfaction, as evidenced by our high retention levels and the feedback we are receiving from customers. We have also continued to deepen our customer relationships through our growing Collaborate International User Conference series, which reflects our expansive global footprint. In 2025, we've hosted events across the US, India, Singapore, and EMEA, with upcoming user conferences in Hong Kong and Australia.

This year, we also anticipate the mixed shifts. We saw in Q3 towards products with relatively higher out-of-pocket, fees will continue to impact adjusted. Ibaon margins into Q4, though, over time.

Respect these impacts to normalize.

I'll conclude and this is a very small component of our business.

Overall, and taking a step back we are pleased with our refined 2025 guidance ranges, we are providing today, particularly amid our ever changing world.

Even with these Trends in mind, we remain confident in our ability to drive year-over-year margin improvements in Q4.

We are expecting to deliver full year revenue growth a high single to low double digit adjusted EBITDA growth rate and an even higher adjusted diluted EPS growth rate.

Steven Marks: We are expecting to deliver full-year revenue growth, a high single to low double-digit adjusted EBITDA growth rate, and an even higher adjusted diluted EPS growth rate, and meaningful free cash flow generation, all just 1 year after closing our strategic acquisition of Sterling. With that, let me turn it back to Scott for closing remarks before we open the line for questions.

We anticipate that our adjusted diluted EPS growth momentum will continue as Revenue ramps and synergies are realized despite the mixed Trend previously mentioned, we expect that quarterly adjusted diluted EPS will remain in the mid 20 cent range.

And meaningful free cash flow generation, all just one year after closing our strategic acquisition of Sterling with that let me turn it back to Scott for closing remarks before we open the line for questions.

And final quarter of the Year representing meaningful expansion on a year-over-year basis.

Thank you Steven.

Scott Staples: These events provide us with direct insight into our customers' needs and emerging industry risks, showcase our subject matter expertise, uncover upsell and cross-sell opportunities, and help cement our position as a category leader. Recently, many of our European customers joined us at our London Collaborate to discuss key topics such as identity fraud, AI-driven screening, and global compliance. The strong turnout, high-value content, and customer engagement underscore the relevance of our solutions, and the trust we are building across markets. Feedback confirms that our customers are looking to us for guidance as they plan for 2026, and we're proud to be a strategic partner in helping them navigate evolving workforce risks. Our back-end automation strategy has also been a key driver of operational efficiency throughout the integration process.

In closing I would like to reemphasize first advantages position as an investment of choice. We are market leader offering proprietary technology and data in a large and growing market.

Scott Staples: Thank you, Steven. In closing, I would like to reemphasize First Advantage's position as an investment of choice. We are a market leader offering proprietary technology and data in a large and growing market. We have significant organic revenue growth potential accelerated by the Sterling acquisition. We are resilient with a flexible cost structure and high revenue diversity that comes from our balanced vertical strategy. We have industry-leading operating margins leading to strong and consistent free cash flow generation. We have a track record of value-accretive capital deployment and balance sheet management. All of this supports our confidence in our ability to achieve consistently strong results, including delivering on the four-year financial targets we established during our Investor Day in May.

On a similar note. We now anticipate, 3 cash flow for the year of 110 to 120 million. This represents a notable increase from our previous commentary. As we have been able to generate incremental cash flow from better working Capital Management and have successfully managed our integration related costs.

We have a significant organic revenue growth potential accelerated by the Sterling acquisition.

We are resilient with a flexible cost structure and high revenue diversity that comes from our balanced vertical strategy.

We have industry, leading operating margins, leading to strong and consistent free.

Our effective tax rate. However, we will be we will be able to utilize certain Provisions within the new law to materially, reduce our 2025 required, cash tax payments.

Cash flow generation.

And we have a track record of value accretive capital deployment and balance sheet management.

we have provided a full chart in the appendix to the earnings presentation with FX capex, interest and other modeling assumptions,

All of this supports our confidence in our ability to achieve consistently strong results, including delivering on the four year financial targets, we established during our Investor day in May.

Looking ahead, we remain focused on executing on our strategy to increase share across our target verticals accelerate international growth and deliver on our best of breed product and platform strategy.

Scott Staples: Looking ahead, we remain focused on executing on our strategy to increase share across our target verticals, accelerate international growth, and deliver on our best-of-breed product and platform strategy. Thank you to the entire First Advantage team for the great work you do to support our customers every day. With that, we will open the line for questions.

Scott Staples: By consolidating fulfillment into a single global engine, we are leveraging years of investment, engineering, and development in robotic process automation, APIs, and AI. We have kept two front-end platforms for customer continuity, but behind the scenes, we have been able to streamline workflows, cut redundancies, and drive efficiency. These efficiencies not only enhance speed and customer satisfaction, but are also expected to create meaningful margin improvement as we grow. Additionally, since announcing the Sterling acquisition, we have increased our synergy target from our original $50 million plus to a range of $65 to $80 million. We have also made solid progress on deleveraging our balance sheet as we work towards our target net level range of two to three times. Stephen will provide additional details shortly on both our synergy progress and deleveraging. Turning to slide seven.

Additionally, we do not expect the government shutdown to materially impact our results. While the shutdown itself, has affected some operational items, such as the government run. E-verify platform. Resulting in some delayed I9 verifications. We expect any delays in processing. I9s will be resolved in the quarter as soon as the government shutdown concludes. And this is a very small component of our business.

Thank you to the entire first advantaged team for the Great work you do to support our customers every day.

With that we will open the line for questions.

Thank you we will now begin the question answer session. At this time if you have a question. 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 two if you are using a speaker we.

Operator: Thank you. We will now begin the question and answer session. At this time, if you have a question, 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 two. If you are using a speakerphone, we request that you pick up your handset while asking your question to provide optimal sound quality. Thank you. Our first question is coming from Ashish Sabadra with RBC Capital Markets. Your line is now open. Please go ahead.

Overall and taking a step back, we are pleased with our refined, 2025 guidance ranges. We are providing today particularly amid our ever-changing worlds, we are expecting to deliver full year Revenue growth, a high single to low double-digit, adjusted ebit, dog growth rate and an even higher adjusted, diluted EPS growth rate and meaningful free cash flow Generation. All just 1 year, after closing our strategic acquisition of Sterling with that, let me turn it back to Scott for closing remarks before we open the line for questions.

We request that you pick up your handset well asking your question to provide small towns quality. Thank you. Our first question is coming from Ashish <unk> with RBC capital market. Your line is now open. Please go ahead.

Thank you, Stephen.

In closing, I would like to re-emphasize First Advantage's position as an investment of choice.

We are a market leader, offering, proprietary technology and data in a large and growing Market.

Alright, Thanks for taking my question. So maybe a two part question as we think about this strong new win momentum that you've talked about and as Youre ramping up these new clients. How should we think about the up sell cross sell as well as new logos going into fourth quarter, but also into 2026 and then the second question would be just the pipeline.

Ashish Sabadra: Thanks for taking my question. Maybe a 2-part question. As we think about this strong new win momentum that you talked about and as you're ramping up these new clients, how should we think about the upsell, cross-sell, and new logos going into Q4 but also into 2026? The second question would be just the pipeline for new logos. Have you seen any changes in the sales cycle, any elongation in the sales cycle? Also any early conversations with your clients, around new win momentum? Thanks.

We have a significant organic Revenue growth, potential accelerated by the Sterling acquisition.

Scott Staples: Throughout the integration process, we have been focused on enhancing our customer value proposition to unlock new logo, upsell, and cross-sell opportunities, while continuing to drive innovation and foster the high-performance culture we are known for. We are consistently leveraging our best-of-breed approach to provide optimal solutions and technology to solve our customers' challenges. Last quarter, we discussed how the expansion of our award-winning Qlik chat call customer care solution and our high-margin First Advantage Work Opportunity Tax Credit product have benefited our customers. We have continued this progress, achieving a milestone in Q3 with the increased usage of the millions of records in our proprietary National Criminal Record File Database across both platforms, something we have been rolling out since Q1 of this year. With our proprietary data and in-house data science teams, we deliver faster insights and a superior experience for everyone, from recruiters to HR teams to candidates.

We are resilient with a flexible cost structure and high Revenue diversity. That comes from our balanced vertical strategy.

For new logos.

We have industry-leading operating margins. Leading to strong and consistent. Free CL, free cash flow generation.

Have you seen any changes in the sales cycle, an elongation in the same cycle.

And we have a track record of value. Agreed to Capital deployment, and balance sheet management.

Also in early.

Conversations with your clients.

Around new win momentum thanks.

Yes, sure I'll start with your comments on the new logo in kind of that impact going forward I'll, let Scott take the pipeline I think you are right and as I mentioned in the prepared remarks, we're expecting our Q4 the contribution of new logo and upsell cross sell to.

Steven Marks: Yeah, Ashish, I'll start with your comments on the new logo and kind of that impact going forward. I'll let Scott take the pipeline. I think you're right, and as I mentioned in the prepared remarks, we're expecting our Q4, the contribution of new logo and upsell, cross-sell, to be in line, if not better than our historical. We did 9% in Q3 with very consistent so far this year. Assuming those deals ramp according to schedule, there's some room to do a little better than our historical averages. We're seeing some good initial order demand from those bigger contracts. A little early to comment on 2026 just overall, I mean, obviously the deals that are just going live in H2 would have some rollover.

All of this supports our confidence, in our ability, to achieve consistently strong results, including delivering on the 4-year Financial targets we established during our industrial day in May.

To be in line, if not better than our historical so we did 9% in Q3 with very consistent so far this year.

Looking ahead. We remain focused on executing on our strategy to increase share across our Target. Verticals accelerate International growth.

And deliver on our best of breed product and platform strategy.

Assuming those those deals ramp according to schedule, but there is some room to do a little better than our historical averages. We're seeing some good initial order demand from those bigger contracts.

Thank you to the entire First Advantage. Team for the great work, you do to support our customers every day.

With that, we will open the line for questions.

A little early to comment on 2006, just overall, but I mean, obviously the deals that are just going live in second half would have some rollover still have to fill out in the rest of the pipeline funnel and thought to execute.

Scott Staples: This powers our ability to reduce turnaround time while increasing the speed, coverage, and effectiveness of our criminal screenings, facilitating comprehensive and timely results for our customers. In October, we made available our Criminal and Motor Vehicle Records Monitoring solutions to the entire customer base, offering another best-of-breed experience to all of our customers. We are also underway in leveraging our best-of-breed approach to enhance the user experience. Over the past 18 months, we have been rolling out a new Applicant Portal. Now, approximately half of our order volume on the First Advantage front end runs through this portal, with customer adoption continuing to grow. This represents the most secure and user-friendly experience we've ever built, featuring device-agnostic design for a seamless experience across devices, customer-specific branding for a familiar and consistent look, and AI-powered features that continuously learn from the candidate interactions to deliver a best-in-class, rage-quick free experience.

Steven Marks: Still have to fill out the rest of the pipeline funnel and still have to execute. It gives us a lot of confidence, certainly in Q4, being able to achieve, if not exceed, the historical norms for upsell, cross-sell, and new logo.

But it gives us a lot of confidence certainly in Q4 being able to achieve if not exceed the historical norms for upsell cross sell and new logo.

Yes. She is on the pipeline we are extremely happy where the pipeline is right now.

Scott Staples: Ashish, on the pipeline, we are, you know, extremely happy where the pipeline is right now. It's at the highest value it's ever been at. The late-stage pipeline for large deals is the best we've really ever seen as a company. That doesn't, you know, mean it translates into, you know, whatever it translates into, it's a great pipeline. We've obviously got very good win rates historically. We're feeling pretty bullish heading into 2026 in terms of the things we can control and our ability to grow organically. Very happy with the pipeline. I think it all comes back to, you know, again, look at that increase in improvement in client retention especially after doing a large merger.

It's at the highest value it's ever been at the the.

Thank you. We will now begin the question answer session at this time. If you have any questions, please press star 1 on your telephone keypad. If at any point, your question has been answered. You may remove yourself from the queue, by pressing star 2. If you're using a speaker phone, we request that you pick up your handset while asking your question to provide optimal sound quality. Thank you. Our first question is coming from Ashish sabadra with RBC Capital markets. Your line is now open. Please go ahead.

The late stage pipeline for large deals is the best we've really ever seen.

As a company that doesn't mean it translates into whatever it translates into but it's a great pipeline. We've obviously got a very good win rates. Historically, so we're we're feeling pretty bullish heading into 2026 in terms of.

The things, we can control and our ability to grow organically.

So very happy with the pipeline and I think it all comes back to.

Thanks for taking my question. So maybe a 2-part question uh as we think about this strong human momentum, that you talked about and as you're ramping up these new clients, how should we think about the upsell cross sell as well as new logos going into post quarter, but also uh, into 2026? And then the second question would be just the pipeline for new logos. Um, as you seen any changes in the sales cycle and elongation in the sales cycle? Uh also any early conversations with your clients uh around new and momentum, thanks.

Again look at that increase in improvement in client retention.

Especially after doing a large merger we are very happy with client retention actually going up.

Scott Staples: In November, we are extending the same modern look and feel to the Sterling front end, bringing the benefits to even more customers. This initiative reflects our commitment to delivering an outstanding user experience, backed by rigorous data, feedback, sentiment analysis, and continuous improvement. It's a win for our customers and their candidates, and a key differentiator for First Advantage. On top of this, we are continuing to see solid momentum and interest in our digital identity products. Negative use of AI and other technologies are creating new risks for companies and organizations, and are driving rapid evolution in the digital identity space. Knowing who you're hiring and confirming who they actually are is critical. Our digital identity solution is fully linked in the hiring lifecycle, with some customers using it multiple times through the recruiting, screening, and onboarding process, which is creating a competitive advantage for First Advantage.

Scott Staples: We are very happy with, you know, client retention actually going up. It means that clients have really resonated with the combination of the Sterling and the First Advantage technology platforms. I think a big shout-out to our tech teams who have done a great job of eloquently putting together these, the backend to the front ends of both the Sterling and First Advantage customer base. In this industry, it's very simple. Clients love to partner with a company who understands their vertical, you know, deeply, which we obviously do, have invested in the key verticals that we're in and have a great technology platform to back it up. That's clearly why pipeline's growing, why the deal flow is been solid.

It means that clients are really resonated with the combination of the of the Sterling and the first advantage technology platforms and I think that.

Yeah, she saw, I'll start with your comments on the uh, the new logo and and kind of that impact. Going forward. I'll let Scott take the pipeline. I think you're right. And as I mentioned, the prepared remarks, you know, we're expecting our Q4 the contribution of new logo and upsell cross sell.

Big Shout out to our tech teams, who have done a great job of eloquently putting together these.

The backend too.

The front ends of both the Sterling and first advantage a customer base.

And in this industry its very simple clients love a a to.

Uh, to be in line, it's not better than our historical. So we did 9% in Q3 with very consistent, you know, so far this year um assuming those those deals ramp according to schedule, you know, there's some room to to, you know, do a little better than our historical averages. We're seeing some good initial order demand from those bigger contracts. Um, a little early to comment on, on 26, just overall, but I mean, obviously, the deals that are just going live in second half would have

Partner with a company who understands their vertical deeply.

Deeply which we obviously do.

And I have invested in the key verticals that we're in and have a great technology platform to back it up.

Over still have to fill out the rest of the pipeline funnel and still have to execute, um, but it gives us a lot of confidence. Certainly in Q4 being able to, uh, achieve if not exceed the historical norms for upsell crosselle and new logo,

That's clearly why our pipeline is growing while the deal flow has been solid we've got a great Tech story, and we back it up with subject matter experts.

Scott Staples: We've got a great tech story, and we back it up with subject matter experts.

Very helpful. Thanks for the time.

Ashish Sabadra: Very helpful. Thanks. Thanks for the color.

Scott Staples: As an early market leader with digital identity solutions, we are able to deepen our strategic dialogue with customers, strengthening our relationships and stickiness of our products. We are highly focused on this attractive opportunity, which has a total addressable market of over $10 billion and an expected growth rate in the mid to high teens. Our digital identity products are continuing to build a strong pipeline as customers navigate the early adoption and pilot phase. Digital identity is a powerful competitive differentiator for First Advantage and indicative of the direction in which our industry is growing. Overall, our customers continue to be excited about the benefits of our best-of-breed platforms, products, data, and AI-enabled technologies. This is evident by our strong customer retention and consistent new logo and upsell cross-sell performance. With that, I will now turn the call over to Stephen.

Thank you. Our next question is coming from Andrew Steinman with Jpmorgan. Your line is now open. Please go ahead.

Operator: Thank you. Our next question is coming from Andrew Steinerman with J.P. Morgan. Your line is now open. Please go ahead.

Thanks Scott.

Obviously I've observed over the years that FAA, a very tech forward, including AI with that in mind.

Andrew Steinerman: Thanks, Scott. You know, obviously, I've observed over the years that FA is very tech-forward, including AI. With that in mind, do you feel that traditional employment background checks has a risk of being disintermediated by AI innovation, and how?

Do you feel that traditional employment background checks has a risk of being decimate disintermediation by AI innovation and half.

Yes, Thanks, Andrew.

As you know we are we have a very strong.

Scott Staples: Yeah. Thanks, Andrew. As you know, we have a very strong tech story. We've got a great team, and I thank you for your question because I don't think we get enough credit in the market for our tech prowess. I mean, I feel that we're basically a Silicon Valley tech shop that just happens to be headquartered in Atlanta, Georgia. We've got, you know, great architects. We've got great engineering prowess. I think when you look at, you know, where AI can help or influence or impact the industry, I only see it or we only see it in beneficial ways. We don't see it as a competitive threat because it's gonna have to be so integrated into the many things that we do.

Tech story, we've got a we've got a great team.

Thank you for your question because I don't think we get enough credit in the market for our tech prowess I mean, I I feel that we're basically a silicon valley Tech shop that just happens to be headquartered in Atlanta, Georgia.

That the, um, the late stage pipeline for large deals is the best we've really ever seen, um, as a company that doesn't, you know, mean it translates into, you know, whatever it translates into, but it's a great pipeline, we've obviously got very. So we're, we're feeling pretty bullish heading into 2026. In terms of, uh, the things we can control and our ability to, uh, grow organically. Um, so uh, very happy with the pipeline and I think it all comes back to, um, you know, again look at that, uh, increase, um, in Improvement in, in client retention, uh, especially after doing a large merger. Um, we are very happy with, you know, client retention actually going up. Um, it means that clients are are really resonated with the

We've got great architects, we've got great engineering prowess.

And I think when you look at.

Where.

AI can can help our influence or impact the industry I only see it are we only see it in beneficial ways.

combination of the of the Sterling and the First Advantage technology platforms. And I think a big shout out to our Tech teams who have done a, a, a great job of of eloquently putting together these the the the back end uh, to uh, to the front ends of, of both the Sterling and and

Scott Staples: Thank you, Scott, and good morning, everyone. Today, I will provide color on our third-quarter results, synergy progress, deleveraging trends, and our narrow 2025 guidance. I'll start with third-quarter results on slide nine. Our third-quarter revenues were $409 million, up 3.8% versus last year on a pro forma basis, with our year-over-year revenue growth rate increasing sequentially from Q2, as expected. Our go-to-market success was in line with our long-term growth algorithm targets, as the combined contribution of new logo and upsell, and cross-sell revenues delivered 9% growth in the quarter, and our retention rate reached 97%. The trends in our base performance continued to moderate on par with how we had forecast the quarter, with base remaining negative on a year-over-year basis. Our solid results were supported by consistent execution on our integration and synergy plans, which remain ahead of schedule.

We don't see it as a competitive threat.

It's going to have to be integrated into the many things that we do I think the big change is the dramatic rise of the risk of.

Scott Staples: I think the big change is the dramatic rise of the risk of identity fraud in the recruiting process and how that maps into the traditional background screen. When you think about running criminal checks or verifications or whatever it might be, the future of this industry is really going to be how that flows from a digital identity check, and that is where a lot of the AI is going to sit because you are going to be leveraging AI to make sure that our customers feel comfortable that they are onboarding the same person that they interviewed. Going from a recruitment to interview to onboarding and to finally I-9, all that has to be tied together with technology and consistent databases.

Our identity fraud in the recruiting process.

How that maps into the traditional background screen.

No.

First Advantage of customer base. Um, and in this industry it it's very simple clients, love a a uh to partner with a company who understands their vertical, you know, deeply which we obviously do, um, and have invested in the key verticals that we're in and have a great technology platform to back it up. Um, that's clearly why, uh, the pipeline's growing while the deal flow is been solid. Uh, we've got a great Tech story and we back it up with subject matter experts

When you think about running criminal checks or verifications or whatever it might be.

Thank you. Thanks. Thanks for the time.

The future of this industry is really going to be how that flows from a digital identity check and that's where a lot of the AI is going to sit.

Thank you. Our next question, is coming from Andrew Steiner with JP Morgan. Your line is now open. Please go ahead.

Because youre going to be leveraging AI to make sure that.

Thanks Scott. Um,

Our customers feel comfortable that they are onboarding the same person that they interviewed so.

So going from a.

Recruitment to interview to Onboarding and to finally, I nine all of that has to be tied together with technology and consistent databases.

You know, obviously, I've observed over the years that essay is very Tech forward, including AI uh, with that in mind. Um, do you feel that Traditions are risk of being decimated in disintermediated by AI Innovation? And

Scott Staples: Adjusted EBITDA for the third quarter was $118.5 million. Our adjusted EBITDA margin of 29% exceeded our expectations, representing an improvement of 130 basis points versus the prior year on a pro forma basis, despite being slightly lower sequentially from Q2 due to mix. Our results were enabled by our continued focus on accelerating synergies, our disciplined approach to cost management, and the scalable nature of our business. As part of the integration process, we are applying best-of-breed fulfillment execution, which is helping improve the combined company's operating margins in line with our historical expectations of the business. Adjusted diluted EPS was $0.30, a 15.4% increase year-over-year, and also ahead of our expectations. The benefits of our greater scale, expense, and capital management, and lower interest expense as a result of our debt repricing and voluntary debt payments to date have supported our per-share earnings.

And we are really the glue behind the scenes that could do that for our customers and that's where a lot of our customer dialogue is going right now and I think a lot of that is going to be AI, driven there's going to be a lot of good AI that are used that are used in that solution to offset the bad AI that people are using for deep.

Scott Staples: We are really the glue behind the scenes that can do that for our customers, and that's where a lot of our customer dialogue is going right now. I think a lot of that's going to be AI-driven. There's going to be a lot of good AI that are used in that solution to offset the bad AI that people are using for deepfakes and other identity, digital identity, you know, hacks. We wanna make sure that we help our customers avoid hiring imposters, which as we told you in our last call, is a extremely increasing risk for them. That's also driving client stickiness. It's driving upsell, cross-sell.

Yeah, thanks Andrew. Um, as you know, we, um, we have a very strong, uh, Tech story. We've got a, we've got a great team and, and, and I thank you for your questions because I don't think we get enough credit in the market for our Tech prowess. I mean, I, I feel that we're basically a Silicon Valley Tech Shop that just happens to be headquartered in Atlanta, Georgia. Um, we've got you know, great Architects, we've got great engineering prowess,

Bakes in other.

Identity digital identity.

Hacks, so we want to make sure that we help our customers avoid hiring and postures.

Which as we told you on our last call.

Extremely increasing risk for them. So that's also driving client stickiness, it's driving upsell cross sell and again it goes back to the fact that our customers see us as a tech powerhouse that can pull this all together for them.

Scott Staples: Again, it goes back to the fact that our customers see us as, you know, a tech powerhouse that can pull this all together for them.

Yeah. Thanks for spending your time, Scott makes a lot of sense.

Andrew Steinerman: Yeah. Thanks for spending the time, Scott. Makes a lot of sense.

With, um, and I think, when you look at, you know where, uh, AI can can help our influence our impact, the industry. I only see it or we only see it in beneficial ways. Um, we don't see it as a competitive threat, um, because it's got to have to be so integrated into the many things that we do. I think the big change is the dramatic rise of the risk of um uh identity fraud in the recruiting process and how that Maps into the traditional background screen. So,

Thank you. Our next question is coming from Andrew Nicholas with William Blair. Your line is now open. Please go ahead.

Operator: Thank you. Our next question is coming from Andrew Nicholas with William Blair. Your line is now open. Please go ahead.

Scott Staples: These have more than offset the impact of the incremental interest on the transaction financing and the diluted impact of the new shares issued for the Sterling acquisition. On slide 10, you can see how we are making great progress on our synergy program. This quarter, we crossed the original $50 million threshold of action synergies, now having actioned $52 million, and exceeding our initial total synergy program goal within only one year. We benefited from the realization of $12 million of synergies in the third quarter, bringing our in-year realization to $30 million. We remain committed to and confident that we will achieve our goal of $65 to 80 million of action synergies within two years, and are pleased to see the consistent success of our integration and synergy execution.

Hi, Good morning, I appreciate you taking my questions.

Andrew Nicholas: Hi. Good morning. Appreciate you taking my questions. Scott, I think you mentioned, as part of the comment on your 5-year contract renewal that a portion of that $100 million is guaranteed. I was just hoping to kind of figure out maybe a little bit more background on that contract. You know, what led to that particular structure? I think that's relatively unique within your broader business. Whether or not that's a one-off or something you'd expect to pursue more regularly going forward.

Scott I think you mentioned.

As part of the call.

Comment on your five year.

Contract renewal that a portion of that.

When you think about running criminal, checks, or verifications or whatever it might be, the the future of this industry is really going to be how that flows from a digital identity check. And that's where a lot of the AI is going to sit. Um, because you're going to be leveraging AI to make sure that

<unk> hundred million is guaranteed.

So I was just hoping to kind of figure out maybe a little bit more background on that contract.

What what led to that particular structure I think that's relatively unique within your broader business and whether or not that's a one off or something you would expect to pursue more regularly going forward.

Andrew Love the question because.

our customers feel comfortable that they are on boarding the same person that they interviewed. So, going from a, a recruitment to interview to onboarding and to finally, I9 all that has to be tied together with technology and consistent uh databases. Uh, and we are really the glue behind the scenes that can do that for our customers and that's where a lot of our customer dialogue is.

This has been a really big focus for us in 2025, and we will continue in years to come.

Scott Staples: Andrew, love the question because this has been a really big focus for us in 20 to 2025 and will continue in years to come. The caveat here is that this will be a little bit of a long road, but this is not a one-off. This was the first of what we think will be the future contract status in this industry, where we do get more stickiness with contracts with guaranteed minimums in our contracts. Again, the caveat is it'll take a long time for this to kind of flow and run, and run out because we're not going to go to existing customers and ask them to change existing contracts. We are trying to put this new clause into all new logo wins and renewals with existing customers.

Now the caveat here is.

That this will be a little bit of a long road, but this is not a one off.

Scott Staples: Looking forward, we are focused on scaling, automating, and applying AI as we continue to execute on our integration priorities. Moving to slide 11, you can see our historical revenue growth algorithm results with combined company data beginning in 2025. As previously mentioned, in the third quarter, our results were driven by strong upsell cross-sell, as well as new logos, supported by consistent, solid retention. Base results came in as expected, with sequential improvement from Q2 despite remaining negative for Q3. Now, turning to cash flow, net leverage, and our debt paydown progress on slide 12. During the quarter, we generated adjusted operating cash flows of nearly $81 million, an increase of $35 million, or 78% on a year-over-year basis. This was driven by the larger scale of our business.

This was the first.

What we think will be the future contract status in this industry, where we do get more stickiness with contracts with guaranteed minimums.

In our contracts.

Again, the caveat is it'll take a long time for this to kind of flow and run and run out because we're not going to go to existing contract customers and ask them to change the existing contracts. We are trying to put this new claws into all new logo wins.

Yeah, thanks for spending your time. Scott makes a lot of sense.

And renewals with existing customers.

To date, we have had very little pushback on this concept.

Thank you. Our next question.

Scott Staples: To date, we have had very little pushback on this concept. There's other things that we're working on to, you know, put more teeth into the contracts, but this is clearly where the industry is now going. We even think things like digital identity and some of our other solutions can actually lead to subscription revenue, and that would then also be included in contracts going forward. I'm glad you picked up on it because it's definitely a change that we're seeing in the industry, and we're kind of leading the charge here.

And I think it's.

Is coming from Andrew. Nicholas with William. Blair your line is now open. Please go ahead.

There's other things that we're working on to put more teeth into the contracts, but this is clearly where the industry is now growing.

And.

We even think things like digital identity in some of our other solutions can actually lead to subscription revenue and that would then also be included in contracts going forward. So I'm glad you picked up on it because it's definitely a change that we're seeing in the industry and we're kind of leading the charge here.

Hi, good morning. I appreciate you taking my questions. Um, Scott. I think you mentioned, uh, as part of the, the comment on your 5 rear contract, renewal that a portion of that.

Scott Staples: Our tight management of our working capital, including collections on receivables, the benefit of the OBBBA, which has reduced our required cash tax payments, and our overall focus on cash flow. Our cash balance at 30 September 2025 was $217 million. With this ample liquidity and cash flow, subsequent to the end of the quarter in November, we made a $25 million voluntary repayment on our debt principal, bringing our total year-to-date principal repayments to over $70 million, most of which has been voluntary using excess cash flow. Our synergized pro forma adjusted EBITDA net leverage ratio at quarter end was 4.2x and represents about a quarter of a turn decrease from a year ago when we closed the Sterling acquisition.

Understood. Thank you and just for a follow up kind of back to the digital identity piece is that something I don't think you've sized it recently, but is that something that can move the needle.

Andrew Nicholas: Understood. Thank you. Just for a follow-up, kind of back to the Digital Identity piece. Is that something, I don't think you've sized it recently, but is that something that can move the needle on upsell, cross-sell next year? Is it still too early to be adding percentages of growth to the algo? Thanks.

100 million is guaranteed. Um, so I was just hoping to kind of figure out maybe a little bit more background on that contract. Um, you know what, what led to that particular structure. I think that's relatively unique within your, your broader business and whether or not that's a 1-off or something you'd expect to pursue more regularly going forward.

An up sell cross sell.

Next year or is it still too early to be adding percentages of growth to the algo. Thanks.

Yeah.

First of all.

Scott Staples: Yeah. First of all, it is the hottest topic with our customers right now. You know, as you know, we've had digital identity products out in the market now for 2, almost 3 years. I would say, in the early stages, it was us educating our customers as to the risks associated with imposters and deepfakes and all the things that come with identity fraud. Something has changed. Over the last, I'd say, roughly 6 months, our customers are now showing us actual instances of, you know, where they've either stopped, you know, a fraudster from entering their company or that they've actually hired an imposter and don't want it to happen ever again. This is completely dominating the conversation right now, and we've got a fantastic product.

It is the hottest hottest hottest topic with our customers right now.

We've as you know we've had digital identity products out in the market now for two almost three years.

And I would say.

Scott Staples: We remain focused on reducing our net leverage towards approximately 3x synergized pro forma adjusted EBITDA within 24 months post-close, and our long-term net leverage target remains 2x to 3x. Moving to slide 13 in our updated 2025 guidance, as a reminder, year-over-year comparisons are on a pro forma basis to allow for easier comparability. Today, we are narrowing our full year 2025 guidance ranges with refined midpoints at or above the midpoints from our original guidance. Our year-to-date results, as well as the momentum we have seen heading into the fourth quarter, give us confidence in our revised guidance ranges, with revenues now in the range of $1.535 billion to $1.570 billion.

In the early stages it was us educating our customers as to the risks associated with and postures and deep fakes and all the things that come with identity fraud.

Andrew love the question because um this has been a really big Focus for us in 20225 and we'll continue in years to come. Now, the caveat here is um that this will be a little bit of a long road but this is not a 1-off. Um, this was the first of what we think will be the future contract status in this industry where we do get more stickiness, with contracts with guaranteed minimums um, in our contracts. Um, again, the the caveat is it will take a long time for this time.

But something has changed.

Over the last I'd say roughly six months, our customers are now showing us actual instances of where they've either stopped.

And then a fraudster from entering their company or that they've actually hired an impostor and want don't want it to happen ever again.

So this is completely dominating the conversation right now and we've got a fantastic product.

And I would call it products because it literally is.

Scott Staples: I would call it products because it literally is a series of 6, 7-plus offerings that are all under the umbrella of digital identity. A couple of things then. One, at some point in 2026, we do plan on quantifying this for you. As soon as we get, you know, we're still in early sales stages, we're doing pilots, and customers are now ramping up on that product. I think at some point in 2026, we'll be able to quantify it. There's gonna be 3 major impacts to digital identity. One, yes, it will drive upsell, cross-sell revenue. Again, we'll quantify that in the future.

As a series of $6 seven plus offerings.

That are all under the umbrella of digital identity. So.

Scott Staples: Supported by strong synergy execution and our continued focus on efficiently managing our business, we now expect to achieve full year adjusted EBITDA margins of approximately 28%, a meaningful expansion from pro forma 2024. Looking at the fourth quarter as implied in our updated full year guidance today, our revenue outlook for Q4 of around 6% year-over-year growth at the midpoint continues to assume a certain degree of macro stability, while keeping in mind that our customers remain in a wait-and-see mode. The impacts of increased tariffs and other policies remain key areas of uncertainty across the global economy, yet our customers continue to hire at consistent volumes. We expect Q4 base growth to remain slightly negative, consistent with Q3, with this trend likely to continue into 2026. As Scott mentioned, we saw very consistent volumes in October, which aligns to our updated Q4 expectations.

To kind of flow and run and run out because we're not going to go to existing contract, uh, customers and ask them to change the existing contracts. We are trying to put this new Clause into all new logo wins, um, and renewals with existing customers. Um, to date. We have had very little push back um on this content. And I and I think it's uh there's other things that we're working on to, you know, put more teeth into the contracts but this is clearly where the industry is now going. Um, and you know, uh, we even think things like digital identity and some of our other Solutions can actually lead to subscription revenue and that would then also be included in contracts going forward. So I'm glad you picked up on it because it's definitely a change that we're seeing in the industry and we're kind of leading the charge here.

Couple of things then.

One at some point in 2026, we do plan on quantifying this for you.

As soon as we get we're still in an early sales stages and we're doing pilots and customers are now ramping up on that product. So I think at some point in 2026, we'll be able to quantify it.

Thank you and just for a follow-up kind of back to the digital identity piece. Is that something? I don't think you sized it recently but is that something that can move the needle?

On upsell crosselle.

Next year or is it still too early to to be adding percentages of growth to to the algo? Thanks.

Going to be there's going to be three major impacts to digital identity. One yes, it will drive up sell cross sell.

Yeah. Uh, first of all,

It is the hottest hottest, hottest topic with our customers right now.

Revenue and again, we'll quantify that in the future.

Two it makes us really sticky with the customers because now we're where we're actually in different.

Scott Staples: Two, it makes us really sticky with the customers because now we're actually in different workflows. You know, when you do digital identity, you're now up in the front of their recruiting workflow, and you're really then sticky throughout the whole process. Three, the byproduct of that is increases in customer retention, which, you know, as Steven said, we, you know, the bare minimum is 96%, but as you can see, we're now at 97%, and hopefully stick there going forward and maybe even higher through the stickiness of this. The last thing is, it also helps sell other products.

Workflows when.

When you do digital identity, you are now up in the front of their recruiting workflow.

And you really then sticky throughout the whole process.

Three so so so.

You know, we've as, as you know, we've had digital identity products out in the market now for 2 almost 3 years. Um, and I would say, uh, in the early stages, it was us educating our customers, as to the risk associated with Impostors and deep fakes and all the things that come with the identity fraud.

The byproduct of that is increases in customer retention, which as Stephen said we.

Scott Staples: We anticipate continued productivity of combined upsell cross-sell and new logo growth, consistent with, if not better than, historical trends. Additionally, the go-lives of our recent large wins and robust new contract pipeline support our expectations for the fourth quarter. We also expect customer retention to remain in line with our historical performance of at least 96%. In the fourth quarter, we expect adjusted EBITDA margins to expand versus the prior year period by more than 100 basis points. This is similar to the expansion we saw in Q3 and results in fourth quarter adjusted EBITDA margins of approximately 28%. While this represents a small sequential decline from Q3 2025, it is in line with the historical trends in our business, reflecting the mix shifts driven by seasonally lower December revenues and some movements in verticals and some movements and volumes between our verticals and products.

We the bare minimum is 96%, but as you can see we're now we're now at 97% and hopefully stick there going forward and maybe even higher.

Through the stickiness of this and the last thing is it also helps sell other products. For example customers are worried about the person that they are interviewing is the same person that they actually run in the background screening on is the same person they actually on board and do the I nine with so digital identity is at.

Scott Staples: For example, customers are worried about the person that they are interviewing is the same person that they actually run the background screen on, is the same person they actually onboard and do the I-9 with. Digital identity is actually giving us a boost to our I-9 sales because we're sitting behind the scenes, and we can triangulate all that data for them if we're the service provider for them. If we're not the service provider for their I-9 product, they have to figure out if it's the same person that filled out the I-9. Customers don't wanna do this. They want us to do that. This is real stickiness. This is driving, you know, multiple levels of upsell, cross-sell. It's a huge issue with clients right now.

Actually be giving us a boost to our <unk> sales.

But something has changed. Um, over the last, I'd say, roughly 6 months, our customers are now showing up actual instances of, you know, where they either stopped. Um, you know, a an a fraudster from entering their company or that they've actually hired an imposter. Um, and want don't want it to happen ever again. Um, so this is completely dominating the conversation right now and we've got a fantastic product um and I would call it products because it literally um is a series of 6 7 plus are all under the umbrella of digital identity.

Because we're sitting behind the scenes and we can we can triangulate all that data for them. If we're the service provider for them. If we're not the service provider for their <unk> product they have to figure out if it's the same person that filled out the <unk> and that customers don't want to do this they want us to do that so this is real stickiness.

This is driving multiple levels of upsell cross sell.

And it's a huge issue with clients right. Now. This is this is again the hottest hot hottest topic in this industry.

Scott Staples: This year, we also anticipate the mixed shifts we saw in Q3 towards products with relatively higher out-of-pocket fees will continue to impact adjusted EBITDA margins into Q4, though over time, we expect these impacts to normalize. Even with these trends in mind, we remain confident in our ability to drive year-over-year margin improvements in Q4. We anticipate that our adjusted diluted EPS growth momentum will continue as revenue ramps and synergies are realized. Despite the mixed trend previously mentioned, we expect that quarterly adjusted diluted EPS will remain in the mid-$0.20 range in the final quarter of the year, representing meaningful expansion on a year-over-year basis. On a similar note, we now anticipate free cash flow for the year of $110 to 120 million.

So the a couple of things then um 1 at some point in 2026, we do plan on quantifying this for you. Um, as soon as we get, you know, we're still in in early, you know, sales stages and we're doing pilots and customers are now ramping up on that product. So I think at some point in 2026, we'll be able to quantify it there, there's going to be there's going to be 3. Major impacts to digital identity 1. Yes, it will drive upsell.

Scott Staples: This is, again, the hottest topic in this industry.

Uh, revenue. And again, we'll quantify that in the future.

Thank you.

The long answers, but great question.

Andrew Nicholas: Thank you.

I appreciate it.

Scott Staples: That was a long answer. Great question.

Okay.

Andrew Nicholas: No, appreciate it.

Thank you. Our next question is coming from.

Operator: Thank you. Our next question is coming from Manav Patnaik with Barclays. Your line is now open. Please go ahead.

Patnaik with Barclays. Your line is now please go ahead.

Hi, Good morning. This is roni Kennedy on for Manav. Thank you for taking my questions can I just ask that you unpack the commentary around October order volumes continuing to directional trends that you experienced for the quarter. It sounds like that reconciles. This week ADP jobs report, which showed a swing into positive territory I think after some.

Um, and you really then sticky throughout the whole process.

Ronan Kennedy: Hi, good morning. This is Ronan Kennedy in for Manav. Thank you for taking my questions. Can I just ask that you unpack the commentary around October order volumes continuing the directional trends that you experienced for the quarter? Sounds like that reconciles to this week's ADP jobs report, which showed a swing into positive territory, I think after some back-to-back months of job losses. Also had a question in relation to, there was a report released earlier this morning that showed October had the highest increase in layoffs since 2023, and I think year to date, layoffs are up 65%. Just wanted to know if you're seeing that as well.

Back to back months of job losses, but also had a question in relation to there was a report released earlier. This morning that showed October at the highest increase in layoffs in 'twenty, three and I think year to date layoffs are up 65% just wanted to know if youre seeing that as well.

Uh 3. So so so the uh the byproduct of that is increases in customer uh retention which, you know, as Stephen said we you know, we uh, the bare minimum is 96% but as you can see, we're now we're we're now at 97 and and hopefully, stick there going forward and maybe even higher

Scott Staples: This represents a notable increase from our previous commentary, as we have been able to generate incremental cash flow from better working capital management and have successfully managed our integration-related costs. As previously noted, the passing of the OBBBA tax law in July does not notably impact our effective tax rate. However, we will be able to utilize certain provisions within the new law to materially reduce our 2025 required cash tax payments. We have provided a full chart in the appendix to the earnings presentation with FX, CapEx, interest, and other modeling assumptions. Additionally, we do not expect the government shutdown to materially impact our results.

I think AI and the macro factors you referenced were.

Ronan Kennedy: I think AI and the macro factors you referenced were given as drivers, but I know you said, you know, with your diversification and resiliency, you're not actually seeing AI impacts and highlighted specific clients as well. Just wanna understand those dynamics as you see them, and potential impacts of that for Base and the other components of your growth into 2026.

Given as drivers, but I know you said with your diversification and resiliency youre not actually seeing.

Impacts and highlighted specific clients as well so just wanted to understand those dynamics as you see them and potential.

Impacts of that for base and the other components of your growth into 'twenty six.

And we're on and so.

Obviously, the macro is on everyone's mind and I'm going to answer your question, but I'm going to put in a couple of other things to give you the picture that we see.

Scott Staples: Yeah, Ronan. Obviously, the macro is on everyone's mind, and I'm gonna answer your question, but I'm gonna put in a couple other things to give you the picture that we see. A couple things. Specifically to October, you know, yes, we are, you know, We had a very good October. The order volume trends were similar to what we saw in Q3, meaning that they were, you know, above our expectations. Now, that doesn't mean November, December will be. It just is a snapshot that October was. You know, we're still in a wait-and-see mode for November, December, but off to a great start in Q4, with the things that we mentioned. We're, you know, we're seeing a good holiday season.

So a couple of things.

Specifically to October.

Scott Staples: While the shutdown itself has affected some operational items, such as the government-run eVerify platform, resulting in some delayed I-9 verifications, we expect any delays in processing I-9s will be resolved in the quarter as soon as the government shutdown concludes, and this is a very small component of our business. Overall, taking a step back, we are pleased with our refined 2025 guidance ranges we are providing today, particularly amid our ever-changing world. We are expecting to deliver full year revenue growth, a high single to low double-digit adjusted EBITDA growth rate, an even higher adjusted diluted EPS growth rate, and meaningful free cash flow generation, all just one year after closing our strategic acquisition of Sterling. With that, let me turn it back to Scott for closing remarks before we open the line for questions. Thank you, Stephen.

Yes, we are.

We are having we had a very good October.

Um, through the stickiness of this. And the last thing is it also helps sell other products. Um, for example, customers are worried about the person that they are. Interviewing is the same person that they actually run the background screen on. It's the same person. They actually on board and do the I9 with so digital identity is actually be giving us a boost to our I9 sales um because we're sitting behind the scenes and we can we we can triangulate all that data for them. If we're the service provider for that. If we're not the service provider for their I9 product, they have to figure out if it's the same person that filled out the I9 is um and that customers don't want to do this, they want us to do that. So this is real stickiness, this is driving, you know, multiple levels of upsell cross sell um and it's a huge uh, issue with clients right now. This is, this is again the hottest hottest Topic in this industry.

The order volume trends were.

Thank you. That was a long answer but great question.

Similar to what we saw in Q3, meaning that they were above our expectations now that doesn't mean November December will be.

No, appreciate it.

It just is a snapshot that October was we're still in a wait and see mode for November December but off to a great start in Q4.

Thank you. Our next question is coming from manov patnaik with bar clay. Your line is now please go ahead.

With the things that we mentioned where we're seeing.

A good holiday season, we're seeing.

Our key customers driving a lot of volume.

Scott Staples: We're seeing our key customers, you know, driving a lot of volume. Number two, on the macro. I think, you know, the world is starved for data right now, or better data right now on this. I will remind people that, or remind the market that, you know, we are enterprise-focused. A lot of what you hear may be SMB-focused, but we're not experiencing at the enterprise level what is being portrayed in the media. I think we've got a unique advantage on the data side in the fact that we can actually see our own order volume, so we know exactly who's being hired and when. Obviously, you know, with the government shutdown, there's no BLS data being reported.

Number two on the macro.

I think the world is starved for data right now are better data right now on this.

And I will I will.

To remind people that I'll remind the market that we are enterprise focused so a lot of what you hear maybe SMB focused.

Scott Staples: In closing, I would like to re-emphasize First Advantage's position as an investment of choice. We are a market leader offering proprietary technology and data in a large and growing market. We have significant organic revenue growth potential accelerated by the Sterling acquisition. We are resilient with a flexible cost structure and high revenue diversity that comes from our balanced vertical strategy. We have industry-leading operating margins, leading to strong and consistent free cash flow generation, and we have a track record of value-accretive capital deployment and balance sheet management. All of this supports our confidence in our ability to achieve consistently strong results, including delivering on the four-year financial targets we established during our investor day in May. Looking ahead, we remain focused on executing on our strategy to increase share across our target verticals, accelerate international growth, and deliver on our best-of-breed product and platform strategy.

But we're not experiencing at the enterprise level, what is being portrayed in the media.

Hi, good morning. This is Ron, Kennedy, I'm from Manoff. Thank you for taking my questions. Um can I just ask that you unpacked commentary around October order volumes, continuing the directional trends that you experience for the quarter? Sounds like that reconciles to this week's ADP jobs report which, um, showed a swing in positive territory I think after some back-to-back months of job losses, but also had a question in relation to there was a report released earlier this morning that showed October the highest increase in layoffs since 23 and I think year to date layoffs are up 65%. Just wanted to know if you're seeing that as well. Um, I think Ai and the macro factors you reference

And I think we've got a unique advantage on the data side and the fact that we can actually see our own order volume. So we know exactly who's being hired and when and obviously with the government shutdown, there's no BLS data being reported.

Were given as drivers. But I know you said, you know, with your diversification and resiliency, you're not actually seeing AI impacts and highlighted specific clients as well. So just want to understand those Dynamics as you see them, uh, and potential impacts of that for Bass and the other components of your growth into 26.

And we've talked in the past about how unreliable the BLS data is anyway.

Yeah, Ronin. So

Scott Staples: You know, we've talked in the past about how unreliable the BLS data is anyway. It had gotten to a point where there was only about 35% participation rate from companies in the BLS data, and it was primarily from SMB. It wasn't very accurate depiction of what we see from the macro standpoint. One, we've got the ability and the uniqueness of seeing actual hiring data real time. We know exactly when, you know, what companies in what industries and what geographies are hiring people. The BLS data was always a few months behind, and every 6 months did a major, you know, revision of the numbers 'cause they didn't get it right.

I've gotten to a point, where there was only about 35% participation rate from companies in the BLS data and it was primarily from SMB.

Obviously obviously, the macro is on everyone's mind and and I'm going to answer your question, but I'm going to put in a couple other things to give you the picture that we see.

It wasn't very accurate depiction.

Um so a couple things um specifically to October, um, you know, yes we are.

What we see from the macro standpoint.

So one we've got the ability and the uniqueness of seeing actual hiring data real time, we know exactly when.

Companies in what industries, and what geographies are hiring people.

And the BLS data was always a few a few months behind and every six months at a major.

Scott Staples: Thank you to the entire First Advantage team for the great work you do to support our customers every day. With that, we will open the line for questions. Thank you. We will now begin the question-and-answer session. At this time, if you have a question, please press Star 1 on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing Star 2. If you are using a speakerphone, we request that you pick up your handset while asking your question to provide optimal sound quality. Thank you. Our first question is coming from Ashish Sabadra with RBC Capital Markets. Your line is now open. Please go ahead. Thanks for taking my question. Maybe a two-part question.

Revision of the numbers because they didn't get it right.

But.

I think our Q3 results and what were saying.

Scott Staples: I think our Q3 results and what we're saying on forward-thinking about the pipeline and where we are with the order volumes is actually showing a very consistent labor market, not a declining labor market. It doesn't mean that there's huge job growth and it doesn't mean that there's huge job losses. It just means that it's consistent. As we get into 2026, we'll talk more about this in our next earnings call, next quarter, we're basically thinking it's 2026 gonna be very similar to 2025. Consistent hiring, not big decreases, not big increases, just more of the same. Ronan, one more point.

You know, we are having we, we had a very good October. Um, the, the order volume Trends were, uh, similar to what we saw in Q3 meaning that they were, you know, above our expectations. Now, that doesn't mean November December, will be, um, it it just is a snapshot that October was, you know, we're still on a wait and see mode for November December. But off to, a great start in Q4 um, with the things that we mentioned. We're you know we're seeing um a good holiday season. We're seeing um our our key customers, you know, driving a lot of volume.

Forward thinking about the pipeline and where we over the on order volumes as is is actually showing a very consistent labor market not a declining labor market.

Number 2 on the macro.

It doesn't mean that.

There's huge job growth in the or and it doesn't means that there's huge job losses. It just means that it's consistent and as we get into 2026.

We'll talk more about this in our next earnings call.

And next quarter, but where we are.

Basically thinking that it's 2026 can be very similar to 2025, consistent hiring I'm not not big decreases not big increases just more of the same.

I I I think you know the world is star for data right now. Are better data right now on this. Um and I will I will I will remind people that or mind the market that you know we are Enterprise focused. So a lot of what you hear and maybe SMB focused, um but we're not experiencing at the Enterprise level. What is being portrayed in the media? Um, and I think we've got a unique advantage on on the data side and the fact,

Scott Staples: As we think about this strong new win momentum that you talked about, and as you're ramping up these new clients, how should we think about the upsell cross-sell as well as new logos going into fourth quarter, but also into 2026? The second question would be just the pipeline for new logos. Have you seen any changes in the sales cycle, any elongation in the sales cycle? Also, any early conversations with your clients around new win momentum? Thanks. Yeah, Ashish, I'll start with your comments on the new logo and kind of that impact going forward. I'll let Scott take the pipeline. I think you're right, and as I mentioned in the prepared remarks, we're expecting our Q4, the contribution of new logo and upsell cross-sell to be in line, if not better than our historical.

And Brian one more point.

So I gave you.

We obviously have the ability to do a qualitative analysis of order volumes and other data sources that we look at but.

Scott Staples: We obviously have the ability to do a qualitative analysis of order volumes and other data sources that we look at. We've also speak to our customers on a regular basis, and I think, you know, we've made this point many, many times. Just this year alone, we've had over 1,500 formal business reviews with our customers. Now, that may be the same customer two or three times. It just shows you that we are formally sitting down with our customers to review their programs, to optimize their screening, to talk about upsell, cross-sell opportunities, and to get their views on their hiring. You know, what we're hearing doesn't necessarily jive with what is being reported in the media.

We also have we've also speak to our customers on a regular basis and I think we've made this point many many times.

Just this year alone we.

We've had over 1500 formal business reviews with our customers now that may be the same customer or two or three times.

Scott Staples: We did 9% in Q3, very consistent so far this year. Assuming those deals ramp according to schedule, there's some room to do a little better than our historical averages. We're seeing some good initial order demand from those bigger contracts. A little early to comment on 2026 overall, but I mean, obviously, the deals that are just going live in the second half would have some rollover. Still have to fill out the rest of the pipeline funnel and still have to execute. It gives us a lot of confidence, certainly in Q4, being able to achieve, if not exceed, the historical norms for upsell, cross-sell, and new logo. Yeah, Ashish, on the pipeline, we are extremely happy where the pipeline is right now. It's at the highest value it's ever been at.

But it just shows you. It shows you that that were formerly sitting down with our customers to review their programs to optimize their screening to talk about upsell cross sell opportunities and to get their views on their hiring.

What companies in what industries and what geographies are hiring people. Um, and the BLS data was always a few, a few months behind and every 6 months did a major, you know, revision of the numbers because they didn't get it right.

And what we're hearing doesn't necessarily Jive with what is being reported in the media. So that's what we're basing our business on.

Scott Staples: That's what we're basing our business on.

Got it. Thank you very much for all that I. Appreciate it and then if I may just to shift gears a little bit.

Ronan Kennedy: Got it. Thank you very much for all that. Appreciate it. Then if I may, just to shift gears a little bit, can you help with how we should think about the Cadence to synergy realization in 2026 and just a reminder on timing for Sterling EPS accretion and also deleveraging?

Can you help with how we should think about cadence synergy cadence of synergy realization in 2006, and just a reminder on.

Timing for Sterling EPS accretion and also deleveraging.

But, you know, I think our Q3 results and what we're saying, um, you know, uh, Forward Thinking About, You know, the the pipeline and where we are with the order volumes is is, is actually showing in a very consistent labor market, not a declining labor market. Um, it doesn't mean that, um, there's huge job growth and that or, or, and it just means that there's huge job losses. It just means that it's consistent and as we get into 2026 and you know, we'll talk more about this in our next earnings call. Uh,

Scott Staples: Late-stage pipeline for large deals is the best we've really ever seen as a company. That doesn't mean it translates into whatever it translates into, but it's a great pipeline. We've obviously got very good win rates historically. We're feeling pretty bullish heading into 2026 in terms of the things we can control and our ability to grow organically. Very happy with the pipeline. I think it all comes back to, again, look at that increase in improvement in client retention. Especially after doing a large merger, we are very happy with client retention actually going up. It means that clients have really resonated with the combination of the Sterling and the First Advantage technology platforms. I think a big shout-out to our tech teams who have done a great job of eloquently putting together the back end to.

Yes, Brian Great question, So as I mentioned, we're at $52 million, our target 65% to 80.

Steven Marks: Yeah, Ronan. Great question. You know, as we mentioned, we're at $52 million. Our target's $65 to 80 million. We obviously, you know, lapped the anniversary as of this week. You know, that remaining, you know, somewhere between $15 and 25 million will come fairly ratably over the next year. It's a lot of operational and fulfillment and data projects that have some of a little bit just more plumbing, more prerequisites that need to be checked off. We still are very confident that we'll achieve it. It should hit fairly ratably over the next 12 months or so as we just complete, you know, one optimization, one efficiency project after another.

We obviously lap the anniversary as of this week.

That remaining.

Somewhere between 15% and $25 million will come fairly ratably over the next year, it's a lot of.

You know, and next quarter, but yeah, we're, we're basically thinking it's 2026. It's going to be very similar to 2025 consistent. Uh, hiring, um, not not big decreases, not big increases, just more of the same.

Operational and fulfillment and data projects that have some have a little bit just more plumbing more more prerequisite that need to be checked off.

We are very confident that we'll achieve it.

And Rona 1 more Point. Um, so I gave you, I, we obviously have the ability to do, uh, qualitative analysis of order volumes, and and other data sources that we look at. But, um,

And it should it should hit fairly ratably over over the next 12 months or so as we just complete.

One optimization one efficiency project after another.

Uh, we also speak to our customers on a regular basis, and I think, you know, we've made this point many, many times. Um,

In terms of EPS accretion.

Steven Marks: You know, in terms of EPS accretion, I mean, you're starting to already see some of that flow through pretty strongly, right? We've got, you know, certainly relative to the pre-acquisition period, you know, really strong EPS numbers in H2 of the year. Some of that is just the operational scale, the fact that, you know, we've got to, you know, consecutive quarters of revenue growth. We've got the synergies flowing through, and then we also have all the work we're doing on the cash flow and debt side of house. The repricing, obviously lower interest rates help us a little bit, and just working capital management. We're driving really strong cash flow, so that's gonna obviously support your interest expense, and help flow things down to EPS.

You're starting to already see some of that flow through pretty strongly right. We've got.

Certainly relative to the pre acquisition period really strong EPS numbers in the second half of the year. Some of that is just the operational scale. The fact that we've got two consecutive quarters of revenue growth.

We've got the synergies flowing through and then we also have all the work we're doing on the cash flow and debt side of house. So the repricing, obviously lower interest rates help us a little bit and just working capital management. So we're driving really strong cash flow. So that's going to obviously support your interest expense.

Scott Staples: The front ends of both the Sterling and First Advantage customer base. In this industry, it's very simple. Clients love to partner with a company who understands their vertical deeply, which we obviously do, and have invested in the key verticals that we're in and have a great technology platform to back it up. That's clearly why the pipeline is growing, why the deal flow has been solid. We've got a great tech story, and we back it up with subject matter experts. Very helpful. Thanks. Thanks for the panel. Thank you. Our next question is coming from Andrew Steinerman with JP Morgan. Your line is now open. Please go ahead. Thanks, Scott. Obviously, I've observed over the years that FA is very tech-forward, including AI. With that in mind, do you feel that traditional employment background checks have a risk of being disintermediated by AI innovation, and how?

Just this year alone, we've had over 1500 formal business reviews with our customers. Now that may be the same customer 2 or 3 times, um, but it just shows you and shows you that in that we are formally sitting down with our customers to review their programs, to optimize their screening, to talk about upsell opportunity and to get their views on their hiring. And you know what we're hearing, doesn't necessarily jive with what is being reported in the media. So that's what we're basing. Our business on,

<unk> helps slow things down to EPS.

And then I think to your to your last point on deleveraging I think we're seeing those trends already kick in as I mentioned strong free cash flow strong EBITDA accretion.

Got it. Thank you very much for all that, I appreciate it. And then if I met uh, just to shift gears a little bit,

Steven Marks: you know, I think to your, to your last point on deleveraging, I think we're seeing those trends already kick in. You know, as I mentioned, you know, strong free cash flow, strong EBITDA accretion. you know, as we build more cash and which ultimately reduces net leverage, we'll continue to see that number start to accelerate, and we still feel like we'll be getting towards that 3x you know, synergized net leverage ratio by the end of next year effectively at the 2-year anniversary of the deal. I think we're on schedule on all three fronts there, Ronan.

can you help with how we should think about Cadence Synergy the Cadence of synergy realization in 26 and just a reminder on

As we build more cash in which ultimately reduces net leverage we will continue to see that number start to accelerate and we still feel like will be.

Timing for Sterling EPS, secretion and also the leveraging.

Yeah, Ron it's a great question. So you know, as we mentioned

Getting towards that three excellent.

Synergize net leverage ratio by the end of next year effectively at the two year anniversary of the deal. So I think we're on schedule on all three fronts of that road.

Thank you very much appreciate it.

Ronan Kennedy: Thank you very much. Appreciate it.

Thank you. Our next question is coming from Scott.

Operator: Thank you. Our next question is coming from Scott Wurtzel with Wolfe Research. Your line is now open. Please go ahead.

With Wolfe research.

Your line is now open. Please go ahead.

Great. Good morning, guys. Thank you for taking my question. So I just wanted to go back to some of the commentary around base growth for 2026, and your expectations for it to continue to remain negative is that right now sort of an expectation that or may negative throughout 2026 are giving you now we are obviously comping a lot of years of negative growth could we potentially see.

Scott Staples: Yeah, thanks, Andrew. As you know, we have a very strong tech story. We've got a great team. I thank you for your question because I don't think we get enough credit in the market for our tech prowess. I mean, I feel that we're basically a Silicon Valley tech shop that just happens to be headquartered in Atlanta, Georgia. We've got great architects, we've got great engineering prowess, and I think when you look at where AI can help or influence or impact the industry, I only see it, or we only see it, in beneficial ways. We don't see it as a competitive threat because it's going to have to be so integrated into the many things that we do. I think the big change is the dramatic rise of the risk of identity fraud in the recruiting process.

Scott Wurtzel: Great. Good morning, guys. Thank you for taking my questions. Just wanted to go back to some of the commentary around base growth for 2026 and your expectations for it to, you know, continue to remain negative. Is that right now sort of an expectation that it will remain negative throughout 2026? Given, you know, we are obviously comping a lot of years of negative growth, could we potentially see an inflection as we get sort of into the H2 of the year? Thanks.

An inflection as we get sort of into the second half of the year.

Yes, Scott Good question I mean, we're not we're not at the point, yet where we can kind of give very specific 2026 commentary I think really our main focus now is kind of looking at the exit velocity. If you will of our order volumes in 'twenty five and what that implies for at least the start to 'twenty six.

Steven Marks: Yeah, Scott, good question. I mean, we're not at the point yet where we can kind of give very specific 2026 commentary. I think really our main focus now is kind of looking at the exit velocity, if you will, of our order volumes in 2025 and what that implies for at least the start to 2026. Just wanted to make sure that people understand that, you know, to Scott's point, you know, it's been a consistently flat hiring environment now for a period of time, and we expect that dynamic to continue. I mean, base has improved dramatically already through the year. It was -5.5% Q1, -3.7% last quarter, now only -1.8%.

We're at 52 million, our our, our Target, 65 to 80. Um, we obviously, you know, last the anniversary as of this week, um, you know, that, that, that remaining, you know, somewhere between 15 and 25 million will come fairly rapidly over the next year. It's a lot of, um, operational and fulfillment and and data projects that that have some of a, a little bit, just more Plumbing, more more prerequisites that need to be checked off, uh, but we still are very confident that we'll achieve it. Um, and it should, it should hit fairly radically over over the next 12 months or so, as we just complete, you know, 1, Optum, 1 efficiency project after another, um, you know, in terms of eps secretion, I mean, you're starting to already see some of that flow through pretty strongly, right. We've got, um, you know, certainly relative to the pre acquisition period, you know, really strong EPS numbers in the second half of the Year. Some of that is just the operational. Scale on the fact that, you know, we we've got to, you know,

Consecutive quarters of Revenue growth. Uh, we've got the synergies flowing through and then we also have all the work we're doing on the cash flow and and and debt side of how

Just wanted to make sure that people understand that to Scott's point, it's been a consistently flat hiring environment now for a period of time and we expect that dynamic to continue I mean bases improve dramatically already through the year. It was negative five 5% in Q1 negative three seven last quarter now only negative <unk> negative one eight is that.

So the re-pricing obviously lower interest rates helps a little bit, um, and just working Capital Management. So we're driving really strong cash flow so that's going to obviously support your interest expense um, and and help and help slow things down to EPS. Um and then you know, I think to your to your last point on deleveraging I think we're seeing those Trends already kick in, you know, as I mentioned you know, strong free cash flow.

Scott Staples: How that maps into the traditional background screen. When you think about running criminal checks or verifications or whatever it might be, the future of this industry is really going to be how that flows from a digital identity check. That's where a lot of the AI is going to sit, because you're going to be leveraging AI to make sure that our customers feel comfortable that they are onboarding the same person that they interviewed. Going from recruitment to interview to onboarding and to finally I-9, all that has to be tied together with technology and consistent databases. We are really the glue behind the scenes that can do that for our customers. That's where a lot of our customer dialogue is going right now, and I think a lot of that's going to be AI-driven.

Slightly negative that we've been talking about in the last couple of quarters, and that's kind of that ballpark that our current expectation that persists for the next few quarters, we'll obviously give out a little bit more refined view.

Steven Marks: You know, -1.8 is that slightly negative that we've been talking about the last couple quarters, and that's kind of that ballpark that our current expectation that persists for the next few quarters. We'll obviously give out a little bit more refined view, you know, as we get into our next earnings call for the 2026 guide. You also have to remember at a slightly negative base with the new logo and upsell, cross-sell, you know, consistency and the momentum we have and where we're hitting all cylinders on retention, even, you know, even with a slightly negative base, you're set up for a pretty good overall growth. You know, we do see just kind of this macro environment persisting.

As we get into our next earnings call for the 26th guide, but you also have to remember is that at a slightly negative base with the new logo and upsell cross sell.

Strong Eva dog creation. Um, you know as we build more cash and and and which ultimately reduces net leverage. We'll continue to see that number start to accelerate and we still feel like we'll be uh getting towards that 3x. Uh, you know, uh, synergize net leverage ratio by by the end of next year, effectively at the, at the 2 year, anniversary of the deal. So I think we're we're on schedule and all 3 fronts there running

<unk> and the momentum, we have and where we're hitting all cylinders on retention.

Thank you very much, appreciate it.

Even with a slightly negative base youre set up for a pretty good overall growth, but we do see just kind of this macro environment persisting theres not really.

Thank you. Our next question is coming from Scott worth with 3 search.

Your line is now open. Please go ahead.

Any kind of a formal outlook on where tariffs are going to take us on immigration policy or all these other things that are kind of impacting just that wait and see mode that customer brand. So little a little too early to get specific but certainly for the time.

Steven Marks: There's not really out, you know, any kind of formal outlook on where tariffs are gonna take us, on immigration policy, on all these other things that are kind of impacting just that wait and see mode that customers are in. A little, a little too early to get specific, but certainly, you know, for the foreseeable future, we kind of see that wait and see consistently flat overall overarching hiring environment.

For the foreseeable future, we kind of see that wait and see consistently flat overall overarching hiring environment.

Scott Staples: There's going to be a lot of good AI that are used in that solution to offset the bad AI that people are using for deepfakes and other digital identity hacks. We want to make sure that we help our customers avoid hiring imposters, which, as we told you in our last call, is an extremely increasing risk for them. That's also driving client stickiness. It's driving upsell, cross-sell. Again, it goes back to the fact that our customers see us as a tech powerhouse that can pull us all together for them. Yeah, thanks for spending your time, Scott. Makes a lot of sense. Thank you. Our next question is coming from Andrew Nicholas with William Blair. Your line is now open. Please go ahead. Hi, good morning. Appreciate you taking my questions.

Got it makes sense and then just as a follow up going back to the kind of the identity market opportunity and you know you mentioned mid to high teens market growth rate I mean, given your position in the screening market and everything.

Negative is that right now? Sort of an expectation that it will remain negative throughout 2026 or given, you know, we are obviously comping a lot of years of negative growth, could we potentially see, uh, an inflection, uh, as we get sort of into the second half of the year? Thanks.

Scott Wurtzel: Yeah, that makes sense. Just as a follow-up, going back to the kind of the identity market opportunity and, you know, you mentioned mid to high teens market growth rate. I mean, given your position, you know, in the screening market and everything, do you think you guys can outgrow that sort of market growth rate over the near to medium term as you sort of, you know, bring this, these solutions into your customer base?

Thank you guys can outgrow that market growth rate over the near to medium term as you sort of bring this these solutions into your customer base.

Yeah, well I mean I think.

The short answer is we don't know.

Scott Staples: Yeah. Well, I mean, I think the short answer is we don't know 'cause it's so new. I think we're really well-positioned. Our customers can go out and buy point solutions to fix some of this, but we're in a really unique position about, you know, being, you know, we feel, you know, one of the only that can sit behind the scenes and help them triangulate all of these things into one solution. The discussions with customers have been phenomenal, and obviously we're very happy about the wins, the pilots, and the launches that we've done recently. It's just so early. It's hard for us to sit back and quantify that it will be a certain number and a certain growth rate.

Because it's so new.

I think we're really well positioned or our customers can go out and.

Buy point solutions to fix some of this but we're in a really unique position about being we feel one of the one of the only that can sit behind the scenes and help them triangulate all of these things into one solution.

Yes Scott, good question. I mean we're not gonna we're not at the point yet where we can kind of get very specific 2026 commentary. I think really our our, our main focus now is kind of looking at the, the exit velocity, if you will of our order volumes in 25 and what that implies for, at least the start to 26. Um, I just wanted to make sure that people understand that, you know, discuss point, you know, it's been a consistently flat hiring environment now for a period of time and we expect that Dynamic to continue. I mean, bases improved dramatically already through the year. It was negative 5 and a half percent.

So the discussions with customers have been phenomenal and obviously, we're very happy about the wins in the pilots and the launches that we've done recently, but it's just so early it's hard for us to sit back and and quantify that it will be a certain number in a certain growth rate, but as I.

Scott Staples: Scott, I think you mentioned as part of the comment on your five-year contract renewal that a portion of that $100 million is guaranteed. I was just hoping to kind of figure out maybe a little bit more background on that contract. What led to that particular structure? I think that's relatively unique within your broader business, and whether or not that's a one-off or something you'd expect to pursue more regularly going forward. Andrew, love the question because this has been a really big focus for us in 2025, and will continue in years to come. Now, the caveat here is that this will be a little bit of a long road, but this is not a one-off. This was the first of what we think will be the future.

If you want negative -37 last quarter now only negative - 1/8, you know, negative - 1/8 is that slightly negative that we've been talking about the last couple quarters. And that's kind of that, that ballpark that our current expectation. That that persists for the next few orders, well obviously get out a little bit more refined view, you know, as we get into our next earnings, call for the 26th guide but you also have to remember at at a, at a slightly

Negative base with the new logo and upsell cross-sell, you know, consistency and then momentum. We have

I said, when we get into 2026, a little bit in these numbers become clearer and we start looking at win rates and pipeline and start doing some math behind the scenes. We will report that out to you because we know it's an important piece of our growth algorithm.

Scott Staples: As I said, when we get into 2026 a little bit and these numbers become clearer and we start looking at win rates and pipeline and start doing some math behind the scenes, we will report that out to you because we know it's an important piece of our growth algorithm.

Okay. Thanks, guys.

Scott Wurtzel: Okay. Thanks, guys.

Thank you once again.

A question. Please press star one on your keypad now.

Operator: Thank you. Once again, if you would like to ask a question, please press star 1 on your keypad now. Our next question is coming from Jeffrey Silber with BMO. Your line is now open. Please go ahead.

And where we're hitting all cylinders on retention um you know, even with a slightly negative base, you're set up for a pretty good overall growth but you know we do see just kind of this macro environment persisting. There's not really, you know, you know, any kind of formal outlook on on where tariffs are going to take us on immigration policy, on all these other things that are kind of impacting just that wait and see mode that customers are in. So a little, a little too early to get specific but certainly, you know, for the time you know, for the foreseeable future, we kind of see that that wait and see. Consistently flat overall overarching hiring environment.

Our next question is coming from Jeff.

With BMO. Your line is now open. Please go ahead.

Thanks, So much I know, it's late I'll just add.

You noted the retention improvement sequentially I think you cited a few factors.

Jeffrey Silber: Thanks so much. I know it's late. I'll just ask one. You noted the retention improvements sequentially. I think you cited a few factors, you know, kind of buried in the Q&A. If I had to focus on a few things, why do you think you saw that retention improve, and is that something you think is sustainable? Thanks.

Scott Staples: Contract status in this industry where we do get more stickiness with contracts with guaranteed minimums in our contracts. Again, the caveat is it'll take a long time for this to kind of flow and run out because we're not going to go to existing customers and ask them to change existing contracts. We are trying to put this new clause into all new logo wins and renewals with existing customers. To date, we have had very little pushback on this concept. I think there's other things that we're working on to put more teeth into the contracts, but this is clearly where the industry is now going. We even think things like digital identity and some of our other solutions can actually lead to subscription revenue, and that would then also be included in contracts going forward.

I'm kind of very end of the Q&A.

Yeah, that makes sense. And then just as a follow-up going back to the, uh, kind of the identity Market opportunity. And, you know, you mentioned mid to high teens market growth rate. I mean, given your position, you know, in the screening market and everything. It's you think you guys can outgrow that sort of market growth rate over the near to medium-term as you sort of, you know, bring this these Solutions into your customer base.

Do you think why do you think you saw that retention improvement and is that something that you think is sustainable. Thank you.

Yes, I think theres a lot to lot that goes into it I mean first thing.

Yeah. Well we I mean I think the the the short answer is we don't know, um, because it's so new. Um I think we're really well positioned.

Scott Staples: I think there's a lot that goes into it. I mean, first thing, we're a very, very customer-focused, customer-centric, customer-inspired company. We spend a lot of time with our customers, as I mentioned with our formal business reviews, and those are only the former ones. We're talking to our customers daily, weekly, monthly. The Collaborate sessions that we talked about in the script have been phenomenally attended. We've got, you know, lots if not most of our large customers attending these Collaborate events around the world. We're spending a lot of time with our customers, and I think there's a couple things that are driving retention. You know, one is we are considered thought leaders in their industry.

We're very very very customer focused customer centric customer inspired company.

our, our customers can go out and

We spend a lot of time with our customers as I as I mentioned with our formal business reviews and those are only the former runs Walmart ones, we're talking to our customers Daily weekly monthly the collaborate sessions that we talked about in the script have been dominantly attend you've got.

Buy Point solutions to fix some of this. But we're in a really unique position about, you know, being you know, we feel, you know, 1 of the 1 of the only that can sit behind the scenes and and help them triangulate all of these things into 1 solution. Um, so

A lot if not most of our large customers attending these collaborate events around the world. So we're spending a lot of time with our customers and I think there's a couple of things that are that are driving retention. One is we are considered thought leaders in their industry.

Scott Staples: I'm glad you picked up on it because it's definitely a change that we're seeing in the industry, and we're kind of leading the charge here. Understood. Thank you. Just for a follow-up, kind of back to the digital identity piece, is that something—I don't think you've sized it recently—but is that something that can move the needle on upsell, cross-sell next year, or is it still too early to be adding percentages of growth to the algo? Thanks. Yeah. First of all, it is the hottest, hottest, hottest topic with our customers right now. As you know, we've had digital identity products out in the market now for two, almost three years. I would say in the early stages, it was us educating our customers as to the risks associated with imposters and deepfakes and all the things that come with identity fraud.

<unk>.

We pick certain we picked certain industry verticals to focus on and we go deep deep deep into those so that we know what what they're dealing with from a compliance standpoint from an onboarding standpoint from a cost pressure standpoint, whatever it might be we know the industry well and and in most cases, we have most of their peers.

Scott Staples: You know, we, you know, we pick certain industry verticals to focus on, we go deep, deep, deep into those so that we know what they're dealing with from a compliance standpoint, from a onboarding standpoint, from a cost pressure standpoint, whatever it might be. We know their industry well. In most cases, we have most of their peers as customers, so we can help them benchmark. We can help them say, Okay, here's what the industry's doing, and here's where you're best in class, and here's where there's gaps. Those gaps are great to point out because what that means is an upsell, cross-sell opportunity, and that's why package density has been such a great driver of growth for us. Vertical knowledge, industry expertise is clearly one of the drivers of retention.

the discussions with customers have been phenomenal. And obviously, we're very happy about the wins and the pilots and the launches that we've done recently, but it's just so early. It's hard for us to sit back and and quantify that, it will be a certain number and a certain growth rate. But as I said, when we get into 2026 a little bit and these numbers become clearer and we start looking at win rates in Pipeline and start doing some math behind the scenes. We will report that out to you because we know it's an app, an important piece of our growth algorithm

Customers. So we can help them benchmark. So we can help them say, okay. Here's what the industry is doing and here's where there's here's where your best in class adhered, where youre, where there is gaps in those gaps are great. The point out because what that means is the upsell cross sell opportunity and that's why package density has been such a great driver of growth for us. So.

Thank you. Once again, if you would like to ask a question, please press star and 1 on your keypad now.

Our next question, is coming from Jeff silver with BML. Your line is now open. Please go ahead.

Thanks so much.

You know, the retention Improvement.

Vertical knowledge industry expertise is clearly one of the drivers of retention the.

The other one is tech.

I mean, as I mentioned earlier, where we're where we're a great Tech company.

Scott Staples: The other one is tech. I mean, as I mentioned earlier, we're, you know, a great tech company. We've got agile pods all around the world. We've got solution engineers. I mean, we're really good at tech. Our products demo really well, which leads to a lot of new logo wins. Customers are very happy with the products. Also, we've really nailed the Sterling integration from a product and platform standpoint. Our vision, our theory from the very beginning of the acquisition was single backend, leveraging all of the great First Advantage automation that's been out there for literally 9, 10 years now. Single backend, the frontends don't change for the customers, so that kept customers from attriting.

Sequentially. I think you cited a few factors um you know kind of buried in the Q&A but if I had to focus on a few things, why do you think you saw that retention improved? And is that something you used to say thank you.

We've got agile pods all around the world. We've got solution Engineers, I mean, where we're really good at tech our products demo really well, which leads to a lot of new logo wins and customers are very happy with with the products and also we've really nailed the sterling integration from a.

Yeah, I think there's a lot that a lot that goes into it. I mean, first thing,

Scott Staples: Something has changed. Over the last, I'd say, roughly six months, our customers are now showing us actual instances of where they've either stopped a fraudster from entering their company, or that they've actually hired an imposter and don't want it to happen ever again. This is completely dominating the conversation right now, and we've got a fantastic product. I would call it products because it literally is a series of six, seven-plus offerings that are all under the umbrella of digital identity. A couple of things then. One, at some point in 2026, we do plan on quantifying this for you. As soon as we get—we're still in early sales stages, and we're doing pilots, and customers are now ramping up on that product. I think at some point in 2026, we'll be able to quantify it. There's going to be.

Product and platform standpoint.

Our vision our theory from the very beginning of the acquisition was single back end.

Leveraging all of the great first advantage automation, that's been out there for literally 910 years now.

Single back end, but the.

The front ends don't change for the customers so that.

We're very, very, very customer focused customer Centric, customer inspired company. Um, we spent a lot of time with our customers, as I, as I mentioned, with our formal business reviews and those are only the form of daily weekly monthly. The collaborate, uh sessions that we talked about in the script have been phenomenally attended. Um, we've got, you know, lots if not you know, most of our large customers attending these collaborative events around the world so we're spending a lot of time with our customers and I think there's a couple of things that are that are driving retention, you know, 1 is we are considered thought leaders in their industry, you know, we we

That kept customers from a trading usually when you're doing M&A. That's the biggest thing that they worry about is are you going to force migrate onto a new platform and the answer was no and it was even better than no. It was like not only not going to force migrate you, but youre actually going to get a series of upgrades because we're taking bad.

Scott Staples: Usually when you do an M&A, that's the biggest thing that they worry about, is, are you gonna force migrate me onto a new platform? The answer was no. It was even better than no. It was like, not only are we not going to force migrate you, but you're actually going to get a series of upgrades because we're taking best of breed from both platforms and giving it to the other platform. There were some things that the Sterling platform did really well that are now becoming available to the First Advantage install base, and there are some of the things that First Advantage did really well that are now becoming available to the Sterling install base, and those are things that are visible. We're talking about functionality, we're talking about best of breed, user experiences, et cetera.

The bride from both platforms and giving it to the other platform. So there were some things that the Sterling platform did really well that are now becoming available to the first advantage installed base and there are some of the things that first advantage did really well, but are now becoming available to the sterling installed base and those are things that are visible. So we're talking about pumps.

Scott Staples: Three major impacts to digital identity. One, yes, it will drive upsell, cross-sell revenue, and again, we'll quantify that in the future. Two, it makes us really sticky with the customers because now we're actually in different workflows. When you do digital identity, you're now up in the front of their recruiting workflow, and you're really then sticky throughout the whole process. Three, the byproduct of that is increases in customer retention, which, as Stephen said, the bare minimum is 96%, but as you can see, we're now at 97%, and hopefully stick there going forward, and maybe even higher through the stickiness of this. The last thing is it also helps sell other products.

Canals were talking about best of breed user experiences et cetera, and the things that are invisible to them.

That we know what, what they're dealing with from a compliance standpoint from a on boarding standpoint, from a cost, pressure standpoint, whatever it might be, we know their industry. Well, and, and in most cases we have most of their peers as customers, so we can help them Benchmark. So we, we can help them say. Okay, here's what the industry is doing, and here's where there's here's where your best in class. And here's where your where there's gaps. And those gaps are great to point out because what that means is an upsell cross sale opportunity and that's why Pakistan's density has been such a great driver of growth for us. So vertical knowledge industry expertise is clearly 1 of the drivers of retention.

The other 1 is Tech.

Scott Staples: The things that are invisible to them are the things that we're leveraging on that First Advantage backend. It's the First Advantage backend with all that great automation, which is driving faster turnaround times. If you look at our turnaround times, which is a key KPI for our customers, our turnaround times are coming down with customers because of the automation. We're enabling them to onboard faster. Onboarding faster is critical for them, especially in high-volume hires 'cause they need the people to do the job. I think it's the combination of vertical expertise and the fact that we actually nailed the technology and the future promises of technology, like how we're rolling out digital ID, how you can integrate your I-9.

Are the things that we're leveraging on that first advantage backend. So the first advantage background backend with all of that great automation, which is driving faster turnaround times. It. If you look at our turnaround times, which is a key kpis for our customers our turnaround times are coming down with customers because of the.

The automation.

We're enabling them to onboard faster and Onboarding faster is critical for them, especially in high volume hires because they need the people to do the job. So I think it's the combination of our vertical expertise and the fact that we actually nailed the technology.

And the future promises of technology like how we're rolling out digital I E. How you can integrate <unk> all that stuff is being eloquently explained to our customers and I think they like the story.

Scott Staples: For example, customers are worried about the person that they are interviewing is the same person that they actually run the background screen on, is the same person they actually onboard and do the I-9 with. Digital identity is actually giving us a boost to our I-9 sales because we're sitting behind the scenes, and we can triangulate all that data for them if we're the service provider for them. If we're not the service provider for their I-9 product, they have to figure out if it's the same person that filled out the I-9. Customers don't want to do this. They want us to do that. This is real stickiness. This is driving multiple levels of upsell, cross-sell, and it's a huge issue with clients right now. This is, again, the hottest, hottest topic in this industry. Thank you.

I mean, as I mentioned earlier, we're, you know, we're we're, we're, we're, we're a great tech company. Uh, we've got agile pods all around the world we've got solution Engineers. I mean, we're we're really good at Tech our products demo really well, which leads to a lot of new logo wins um and customers are very happy with with the products and also we really nailed the Sterling integration from a product and platform. Standpoint our, our vision, our Theory from the very beginning of the acquisition was single backend. Um, leveraging, all of the great First Advantage automation, that's been out there for literally 9 10 years now. Um,

Scott Staples: All that stuff is being eloquently explained to our customers, and I think they like the story. Appreciate the call. Thanks.

I appreciate the color. Thanks.

Single backend, but the front ends don't change for the customers. So that...

Thank you. Our next question is coming from Charles <unk> with Jefferies.

Operator: Thank you. Our next question is coming from Hamzah Mazari with Jefferies. Your line is now open, please go ahead.

It is now open. Please go ahead.

Hey, guys. This is harold onto on for stuff anymore.

Hamzah Mazari: Hey, guys. This is Hamzah Mazari on for Stephanie Moore. Just, I guess, real quick one from me. In terms of international growth, I know international growth has seen several quarters of robust growth. You know, if you could just provide any more color, you know, I guess, how that's shaping up. It seems as though the UK has been a bright spot even though, you know, from, we've heard that the UK still is in some areas are still weak. Just I guess anything you're doing there. I guess on your verticals, you know, and I think you called out, you know, your healthcare trends, but I believe, you know, you see some seasonal pickup in transportation too.

Yes.

Quick one for me just.

In terms of international growth International growth has been in several quarters of robust growth.

Could you just provide any more color on I guess.

Akshay for both it seems as though that you choose.

A bright spot.

<unk>.

You heard that.

Safeco.

And so some areas are still weak so just I guess anything you're doing there and then I guess on your verticals.

Scott Staples: That was a long answer, but great question. No, appreciate it. Thank you. Our next question is coming from Manav Patnaik with Barclays. Your line is now open. Please go ahead. Hi, good morning. This is Ronan Kennedy. I'm from Manav. Thank you for taking my questions. Can I just ask that you unpack the commentary around October order volumes continuing the directional trends that you experienced for the quarter? Sounds like that reconciles to this week's ADP jobs report, which showed a swing into positive territory, I think, after some back-to-back months of job losses. I also had a question in relation to there was a report released earlier this morning that showed October had the highest increase in layoffs since 2023. I think year-to-date layoffs are up 65%. Just wanted to know if you're seeing that as well.

Thank you Carlo.

Sure.

Health care trends.

You see some.

Seasonal pick up in transportation.

That kept customers from a trading. Uh, usually when you do an m&a, that's the biggest thing that they worry about is, are you going to force, migrate me onto a new platform? And the answer was no and it was even better than no. It was like, not only not going to force migrate you but you're actually going to get a series of upgrades because we're taking best of breed from both platforms and giving it to the other platform. So there was some things that the Sterling platform did really well, that are now becoming available to the First Advantage to install base. And there are some of the things that first Advantage did really well, that are now becoming available to the Sterling install base and those are things that are visible. So we're talking about functionality, we're talking about best of breed. Uh, user experience is ETC, and the things that are invisible to them, are are the things that we're leveraging on that first Advantage. Uh, back end. So it's the first Advantage background back end with all that great automation which is driving faster. Turnaround times if

So she useful.

In transportation and in line with what you saw historically.

Hamzah Mazari: Is the seasonal pickup in transportation in line with what you saw historically, or just anything there that would be helpful? Thank you.

It would be helpful. Thank you.

Yes.

Doug It's even got used to say, yes, yes, hereon on international I mean look we're still seeing the momentum we've seen the last few quarters.

Steven Marks: Yeah, Hamzah. No, go ahead. Oh, go ahead, Steven. Go ahead. You start. I'll tell you what, yeah. Yeah, Hamzah, on international, I mean, look, we're still seeing the momentum we've seen the last few quarters, you know, sustain if not accelerate a little bit. International was up a little over 11% in total, so you know, again, like the trend we had last quarter, outpacing the consolidated business. You're right, the UK market's been certainly a strong point there, and some of the underlying verticals are still showing some good strength there, and there's some government regulation that's also helping us out. Honestly, we saw growth across all 3 of our international regions. And you know, you remember we'd had that larger financial services win in Australia.

Sustain if not accelerate a little bit international was up a little over 11% in total so again like the trend we had last quarter outpacing the consolidated business and you are right in the UK market has been certainly a strong point there and some of the underlying verticals are still still showing some good strength, there and theres. Some some government regulation, that's also helping us out.

If you look at our turnaround times, which is a key kpi for our customers, our turnaround times are coming down with customers because of the automation. So we're, we're enabling them to onboard faster, and onboarding faster is critical for them, especially in high volume hires because they need the people to do the job. So I think it's the combination of our vertical expertise and the fact that we

Scott Staples: I think AI and the macro factors you referenced were given as drivers, but I know you said with your diversification and resiliency, you're not actually seeing AI impacts and highlighted specific clients as well. I just want to understand those dynamics as you see them and potential impacts of that for base and the other components of your growth into 2026. Yeah, Ronan. Obviously, the macro is on everyone's mind. I'm going to answer your question, but I'm going to put in a couple of other things to give you the picture that we see. A couple of things. Specifically to October, yes, we are. We had a very good October. The order volume trends were similar to what we saw in Q3, meaning that they were above our expectations. That doesn't mean November, December will be. It just is a snapshot that October was.

Actually nailed the the technology, um and the future Promises of Technology, like how we're rolling out digital ID, how you can integrate your I9, all that stuff is being eloquently explained to our customers. And I think they like the story.

But honestly, we saw we saw growth across all three of our international regions.

And you remember we've had that that larger.

Financial services win in Australia, We've had some other go to market success over the course of the year as well so.

Thank you. Our next question, is coming from Harold Andor with Jeffrey is now open. Please go ahead.

Scott Staples: We've had some other go-to-market success over the course of the year as well. Really strong base, really strong, you know, upsell, cross-sell, new logo type winning there at international. I'll let Scott fill in the verticals, but I think international has been kind of ahead of the curve and continue to showing that growth and not accelerate a little bit in Q3. Yeah, Hamzah, on the verticals, you mentioned healthcare. I think it's important to note healthcare for us is really 4 sub-businesses. It's acute care, think of hospital networks, post-acute care, life sciences, and healthcare staffing. Post-acute care, life sciences, and especially healthcare staffing really did well in the quarter.

Hey guys, this is carolando on for Stephanie Moore.

Really strong base really strong upsell cross sell new logo type winning there in international.

Let Scott fill in the verticals I think international has been kind of ahead of the curve and continue to showing that growth does not accelerate a little bit in third quarter.

Yes.

The verticals.

So you mentioned.

Health care.

I think it's important to note health care for US is really four sub businesses. So it's acute care think of hospital networks post acute care.

Life Sciences and healthcare staffing.

Our post acute care life Sciences, and especially health care staffing really did well in the quarter. It was really just the hospital networks and it's completely 100% tied to what's going on in Washington D C with Medicare and Medicaid, it's not like there's less demand for their.

Scott Staples: We're still in a wait-and-see mode for November, December, but off to a great start in Q4. With the things that we mentioned, we're seeing a good holiday season. We're seeing our key customers driving a lot of volume. Number two, on the macro, I think the world is starved for data right now, or better data right now on this. I will remind people, or remind the market, that we are enterprise-focused. A lot of what you hear may be SMB-focused, but we're not experiencing at the enterprise level what is being portrayed in the media. I think we've got a unique advantage on the data side in the fact that we can actually see our own order volume, so we know exactly who's being hired and when. Obviously, with the government shutdown, there's no BLS data being reported.

Scott Staples: It was really just the hospital networks, and it's completely 100% tied to what's going on in Washington, D.C., with Medicare and Medicaid. It's not like there's less demand for their services. In fact, there's more demand. You've got a aging U.S. population, and you probably know from your own experiences, that there's a tremendous demand in healthcare. It's just that a lot of these smaller regional, even rural hospital networks are dependent upon Medicare and Medicaid funding, and there's a lot of uncertainty in that right now. They've cut back their hiring just because they don't know where their funding is going to come from. Now, healthcare staffers have filled in the gap because they still need the services. I think this is just an aberration.

Um just I guess, um, real quick 1 for me. Just um in terms of international growth, I know International growth is needed, several quarters of robust growth. You know, if you could provide any more color, I guess how that shape and how the team to study the UK has been, um, a bright spot, you know, you know, from we we've heard that the UK still is, uh, in some some areas are still weak. So, just, I guess anything you're doing there and then, um, I guess on your vertical close, you know, and I, I think you can call out, you know, uh, with your, uh, Healthcare Trends or but I believe, you know, you see some, um, seasonal pickup and transportation to, um, it's a seasonal, uh, pickup and transportation and, um, in line with what you saw historically, or just anything, that will be helpful. Thank you.

Offices in fact, Theres more demand you've got an aging U S population and you you probably know from your own experiences.

That theres a tremendous demand in health care, it's just that a lot of these smaller regional even rural hospital networks are dependent upon Medicare and Medicaid funding.

And Theres a lot of uncertainty in that right now so they've cut back their hiring just because they don't know where the funding is going to come from now healthcare staffers have filled in the gap because they still need the services.

So I think this is just an aberration.

I think this is something that will play out over the next couple of quarters will stabilize.

Scott Staples: I think this is something that will play out over the next couple of quarters, will stabilize. We're very bullish on healthcare because of, you know, the aging population, you know, incredible need for services. Even though it's slightly down, I would say our strategy is actually to double down in this industry. Because it's gonna be a tremendous growth industry long term. It's just having a little bit of an aberration right now, and it's completely tied to the smaller and mid-size hospital networks. It doesn't really affect the larger hospital networks, and affects mostly the nonprofits.

Scott Staples: We've talked in the past about how unreliable the BLS data is anyway. It had gotten to a point where there was only about 35% participation rate from companies in the BLS data, and it was primarily from SMB. It wasn't a very accurate depiction of what we see from the macro standpoint. One, we've got the ability and the uniqueness of seeing actual hiring data real-time. We know exactly what companies in what industries and what geographies are hiring people. The BLS data was always a few months behind, and every six months did a major revision of the numbers because they didn't get it right. I think our Q3 results and what we're saying on forward-thinking about the pipeline and where we are with order volumes is actually showing a very consistent labor market, not a declining labor market. It doesn't mean that.

We're very bullish on health care because of.

The aging population.

Incredible need for services.

And even though it's slightly down I would say our strategy is actually to double down in this industry, because it's going to be a tremendous growth in street long term, it's just having a little bit of an aberration right now and it's completely tied to the smaller and midsize hospital networks. It doesn't really affect the larger hospital networks and FX, mostly the nonprofits.

All 3 of our our International regions. Um, and you know you remember we've had that that larger uh Financial Services win in. In in Australia we've got had some other go to market success over the course of the year as well. So um really strong base really strong, you know, upsell cross-sell, new logo type winning there in international. Um although it's got fill in the verticals but the international has been kind of ahead of the curve and and and continue to showing that growth and not accelerate a little bit in the third quarter.

Yeah, Harold on on the verticals. Um so you mentioned um uh Healthcare. I think it's important to note healthcare for us is really for

Sub businesses so it's acute care. Think of Hospital networks, Post Acute Care.

Uh, life sciences and Healthcare Staffing.

Okay.

Thank you next.

The next question is coming from Pete Christiansen with Citi.

Operator: Thank you. Our next question is coming from Peter Christiansen with Citi. Your line is now open. Please go ahead.

Your line is now open. Please go ahead.

Thank you good morning, Thanks for squeezing me in here.

Nice nice execution here, some some nice trends.

Peter Christiansen: Thank you. Good morning. Thanks for squeezing me in here, nice execution here. Some nice trends. Scott, a quick question. I wanna double-tap on the AI disruption kind of concern, which I think you laid out really well. I think there is a slight nuance to the argument, though, that at least on the fringe and maybe in certain pockets of your base with AI, then maybe those employers can actually in-house some of their onboarding or screening type of duties there. How would you respond to that? What's your opinion there? Then as a quick follow-up, great to see that you combined the databases here, in building up your proprietary database. Can you just talk us through, you know, how that's delivering on data cost savings?

Just a quick question I wanted double tap on the.

AI disruption kind of concern.

I think you laid out really really well I think there is a slight nuance to the argument, though that at least on the strange in maybe in certain pockets of your base with AI than maybe those employers can actually in house some of their onboarding more screening type of.

Scott Staples: There's huge job growth. It doesn't mean that there's huge job losses. It just means that it's consistent. As we get into 2026, we'll talk more about this in our next earnings call next quarter, but we're basically thinking that 2026 is going to be very similar to 2025. Consistent hiring, not big decreases, not big increases, just more of the same. Ronan, one more point. I gave you—we obviously have the ability to do a qualitative analysis of order volumes and other data sources that we look at. We've also spoken to our customers on a regular basis. I think we've made this point many, many times. Just this year alone, we've had over 1,500 formal business reviews with our customers. That may be the same customer two or three times, but it just shows you.

Uh, Post Acute Care, life sciences and especially Healthcare, Staffing really did well in the quarter. It was really just a hospital networks and and it's completely 100% tied to what's going on in Washington DC with Medicare and Medicaid. It's not like there's less demand for their services. In fact, there's more demand. You've got a aging US population and you, you probably know from your own experiences, uh, that there's a tremendous demand in healthcare. It's just that a lot of these smaller Regional. Even rural Hospital networks. Um, are dependent upon Medicare and Medicare

Duties there.

How would you respond to that what's your opinion, there and then as a quick follow up great to see that you combine the databases here.

Yes.

The in building a proprietary database.

Can you just talk us through.

That's delivering on data cost savings and is there a point where of mass criticality, where you really could see an inflection in your data costs because of the.

Peter Christiansen: Is there a point where, of mass criticality where you really could see an inflection in your data cost because of the years that you've built up your proprietary database? Thank you.

Years that you've built up your proprietary database. Thank you.

Yeah, Stephen I'll take the first part of if you take the second part.

Scott Staples: Yeah, Steven, I'll take the first part if you take the second part. On the AI disruption, Pete, I mean, my short answer is no chance. Customers do not want to do this. This is not where they want to spend their engineering dollars and resources, and it's extremely complicated. It's loaded with compliance. There's not a lot that they're going to do internally with AI through the screening process. Now, that's not true with recruiting. I think AI is, you know, fully in play with recruiting, and it's having great results. Using AI-driven recruiting tools in the front end of the recruiting process makes a lot of sense. That only feeds then, you know, better information to us.

So on the AI disruption P. I mean, my short answer is no chance customers do not want to do this this is not where they want to spend their engineering.

And resources and it's extremely complicated it's loaded with compliance.

Funding. Um, and there's a lot of uncertainty in that right now. So they've cut back their hiring just because they don't know where, uh, the funding is going to come from now Healthcare staffers have filled in the Gap because these they still need the services. Um, so I think this is just an aberration. Uh, I think this is something that will will play out over the next couple of quarters will stabilize. Um we're very bullish on healthcare because of uh you know the Aging population the you know, incredible need for services. Um and you know, even though it's slightly down I would say our strategy is actually to double down in this industry because it's going to be a tremendous growth industry, long term, it's just having a little bit of an aberration right now and it's completely tied to the smaller and mid-size Hospital networks. It doesn't really affect the larger Hospital networks and it affects mostly the nonprofits

There's not a lot that they are going to do.

Internally.

With AI through the screening process now that's not that's not true with recruiting I think AI is is fully in play.

Scott Staples: That we are formally sitting down with our customers to review their programs, to optimize their screening, to talk about upsell, cross-sell opportunities, and to get their views on their hiring. What we're hearing doesn't necessarily jive with what is being reported in the media. That's what we're basing our business on. Got it. Thank you very much for all that. I appreciate it. If I may, just to shift gears a little bit, can you help with how we should think about the cadence of synergy realization in 2026 and just a reminder on timing for Sterling EPS accretion and also deleveraging? Yeah, Ronan, great question. As we mentioned, we're at $52 million. Our target's $65 to 80 million. We obviously lapped the anniversary as of this week. That remaining somewhere between $15 and 25 million will come fairly radically over the next year.

Thank you. Our next question is coming from the Pete, Christensen with City.

Your line is now open. Please go ahead.

With recruiting and it.

And it's having great results, so using AI driven recruiting tools in the front end of.

Of the recruiting process makes a lot of sense, but that only feeds then better information to us.

See AI as you know as as a real lift in quality.

Scott Staples: You know, we see AI as, you know, as a real lift in quality, because AI should improve the intake of data at the very front end of the recruiting process so that when it then comes to us to then run a digital identity, to then kick off a background screen, to then onboard with an I-9, we have better data, because AI has helped with the quality of that data. Whether it's a picture capture, whether it's a biometric capture that the AI is doing, whether, you know, AI is helping the candidate fill out the application to, you know, to make sure that they're putting in their address correctly, their name is all instances of their name are captured, first name, middle initial or and last name and, you know, capturing maiden names, all that kind of stuff.

Because.

AI should improve the intake of data at the very front end of the recruiting process. So that when it then comes to US to then run a digital identity then kick off a background screen then onboard of the 99, we have better data because AI has helped with the quality of that data so whether it's.

A picture catcher whether its a biometric capture that AI is doing whether.

Ah is helping the candidate fill out the application to make sure that they're putting in their address correctly their name is.

Scott Staples: It's a lot of operational and fulfillment and data projects that have some of a little bit just more plumbing, more prerequisites that need to be checked off. We still are very confident that we'll achieve it, and it should hit fairly radically over the next 12 months or so as we just complete one optimization, one efficiency project after another. In terms of EPS accretion, I mean, you're starting to already see some of that flow through pretty strongly, right? We've got, certainly relative to the pre-acquisition period, really strong EPS numbers in the second half of the year. Some of that is just the operational scale, the fact that we've got two consecutive quarters of revenue growth. We've got the synergies flowing through, and we also have all the work we're doing on the cash flow and debt side of the house.

Thank you. Good morning. Thanks for squeezing me in here and uh, nice, nice execution here. Some some nice Trends Scott, a quick quick question. I want to double tap on the um uh AI disruption kind of concern. Uh which I think you laid out really, really well, I think there there's a slight Nuance to the argument though that at least On The Fringe and maybe in certain parts of your base with AI. Then maybe the those employers can actually in-house some of their onboarding or screening type of, um, duties there, how would you respond to that? What's your opinion there and then as a quick follow-up. Um, great to see that you combine, the databases that here. Um and uh, it the and building up your proprietary database, can can you just talk us through? You know, how how that's delivering on data cost savings and is there a point where of mass criticality where you you really could see an inflection in your data call?

Because of, uh, the years that you've built up your proprietary database. Thank you.

All instances of their name or captured first name middle initial or our last name and <unk>.

Maiden names all that kind of stuff it only helps us, but it doesn't infringe any way on our business model and in fact that.

Scott Staples: It only helps us, it doesn't infringe any way on our business model. In fact, you know, it's an improvement in quality, which actually also could help with an improvement in turnaround times. Because the better data we get from an ATS or from an AI-enhanced recruiting engine, it makes our job that much easier. I think with all of the FCRA compliance laws, with, you know, with all of the unique thousands and thousands of data sources that need to be hit, I don't see customers doing this themselves in any scenario.

It's an improvement in quality.

Which actually also could help with an improvement in turnaround times, because the better data, we get from an ETF or from a AI enhanced recruiting engine.

Yeah. Uh Stephen, I'll take the first part if you take the second part. Um, so on the AI disruption uh, be. I mean, my short answer is no chance. Um, customers do not want to do this. This is not where they want to spend their engineering dollars and resources and it's extremely complicated. It's loaded with compliance. Um, there's there's not a lot.

It makes our job that much easier.

But I think with all of the CRA compliance laws with.

With all of the unique thousands and thousands of data sources that needs to be hit.

I don't see customers doing this themselves in any any scenario.

Scott Staples: The repricing, obviously, lower interest rates helps a little bit, and just working capital management. We're driving really strong cash flow, so that's going to obviously support your interest expense and help flow things down to EPS. I think to your last point on deleveraging, I think we're seeing those trends already kick in. As I mentioned, strong free cash flow, strong EBITDA accretion. As we build more cash, which ultimately reduces net leverage, we'll continue to see that number start to accelerate. We still feel like we'll be getting towards that 3x synergized net leverage ratio by the end of next year, effectively at the two-year anniversary of the deal. I think we're on schedule on all three fronts there, Ronan. Thank you very much. Appreciate it. Thank you. Our next question is coming from Scott Wortzel with Wolf Research.

And then Pete on your on your data question I think two things there one I mean, leveraging the data assets and resources of the two combined company. That's been a core part of our cost of sales as a component of our synergy program and as you can see where we're at on that timeline already we're already above and beyond the original $50 million target.

Steven Marks: Yeah. Then Pete, on your data question, I think, you know, two things there. One, I mean, leveraging the data assets and resources of the two combined companies has been a core part of our cost of sales component of our synergy program. As you can see, you know, where we're at on that timeline, you know, we're already above and beyond the original $50 million target. We're doing well there and leveraging those as in many places in the business. To Scott's earlier point on the Q&A, you know, we're a tech company at heart, and tech companies love data.

We're doing well there and leveraging those in many places in the business, but to Scott's earlier point on the Q&A.

Company at Heart and Tech companies Love data and.

We will continue to invest in ways to grow our databases and when we give out the full year numbers at the end of that at the end of the year on the Q4 call Youll see growth in our NCR app, you'll see growth in our verified databases and then it's not just growing the database of the deleveraging them in as many ways as possible, but that'll continue to be a storyline.

Steven Marks: We'll continue to invest in ways to grow our databases and when we give out the full year numbers at the end of the year on the Q4 call, you'll see growth in our NCRF, you'll see growth in our verified databases. It's not just growing the databases, it's leveraging them in as many ways as possible, but that'll continue to be a storyline in a way that we improve the quality of our products, improve the quality of our P&L and cash flow. It's always gonna be a part of our story here.

Front end of the recurring process so that when it then comes to us to, then run a digital identity to then kick off a background screen to then on board with an I9, we have better data uh because AI is helped with the quality of that data. So whether it's uh,

That we.

Improve the quality of our products include them improve the quality of our P&L and cash flow, but it's always going to be a part of our story here.

Scott Staples: Your line is now open. Please go ahead. Great. Good morning, guys. Thank you for taking my questions. I just wanted to go back to some of the commentary around base growth for 2026 and your expectations for it to continue to remain negative. Is that right now sort of an expectation that it will remain negative throughout 2026? Given we are obviously comping a lot of years of negative growth, could we potentially see an inflection as we get sort of into the second half of the year? Thanks. Yeah, Scott, good question. I mean, we're not going to—we're not at the point yet where we can kind of give very specific 2026 commentary.

Pete why don't you one other thing I'll add one other thing I'll add to it is.

Scott Staples: Pete, one other thing I'll add. Yeah, one other thing I'll add to it is, and again, this kind of ties back to retention. I know I didn't mention this when I got the retention, you know, question earlier. You know, we have literally been automating, you know, internal processes and automating, you know, our APIs to data sources literally for 10 years now. For some reason, over the last year or so, we are starting to get, you know, amazing accelerated payback on this. Clients are actually feeling our fast turnaround times. We've also particularly solved some of the sticky data source, known data source issues in our industry, certain counties or certain states or whatever it might be.

And again this kind of ties back to retention I know I Didnt mentioned this one that got the retention question earlier.

But we have literally been automating internal.

Processes and automating.

Our API two data sources literally for 10 years now and for some reason over the last year or so we're starting to get.

A picture capture whether it's a biometric capture that the AI is doing, whether you know, AI is helping the candidate, fill out the application to, you know, to make sure that they're putting in their address correctly. Their name is all all instances of their name or captured first name middle initial or or and last name, or, you know, capturing maiden names, all that kind of stuff. It only helps us. But it doesn't infringe any way on our business model. In fact. It, you know, it's, it's an improvement in quality, um, which actually also could help with an improvement in turnaround times because the better data we get from an ATS or from a, uh, AI enhanced, uh, recruiting engine. Uh, it makes our job that much easier.

Amazing accelerated payback on this so clients are actually feeling our fast turnaround times and we've also particularly solved some of the sticky data source.

Scott Staples: I think really our main focus now is kind of looking at the exit velocity, if you will, of our order volumes in '25 and what that implies for at least the start of '26. I just wanted to make sure that people understand that, to Scott's point, it's been a consistently flat hiring environment now for a period of time. We expect that dynamic to continue. I mean, base has improved dramatically already through the year. It was negative 5.5% Q1, negative 3.7% last quarter, now only negative 1.8%. Negative 1.8% is that slightly negative that we've been talking about the last couple of quarters. That's kind of that ballpark, that our current expectation that persists for the next few quarters. We'll obviously give out a little bit more refined view as we get into our next earnings call for the '26 guide.

But I think with all of the FCRA compliance, the laws, with, um, you know, with all of the unique, thousands and thousands of data sources that need to be hit, um, I don't see customers doing this themselves in any scenario.

Known data source issues in our industry certain counties or certain states or whatever it might be.

So when you sit down and do these business reviews with customers and you show them that their turnaround times are coming down and they feel that their turnaround times are coming down because of our investments in automation and again, that's all in the first advantage backend that we talked about and now Sterling customers are legacy customers are starting to feel a snap too because we're at.

Scott Staples: When you sit down and do these business reviews with customers and you show them that their turnaround times are coming down and they feel that their turnaround times are coming down because of our investments in automation. Again, that's all in the First Advantage backend that we talked about. Now Sterling customers, our legacy customers are starting to feel this snap too, because we're using our fulfillment engine on the backend for them. That helps with customer retention. You know that is just, you know, the power of that is showing up in the retention numbers. Again, this is something that our competitors just don't have. We are light years ahead of them, and this is a big competitive moat for us.

Yeah, and and impede on your on your data question. I think, you know, 2 things there 1, I mean, leveraging, the data assets and resources of the 2 combined companies has been a core part of our, our cost of sales component of

Using our fulfillment engine on the back end for them.

That helps with customer retention.

And that is just the power of that is is it's showing up in the retention numbers in.

Scott Staples: You also have to remember, at a slightly negative base with the new logo and upsell, cross-sell consistency, and then momentum we have and where we're hitting all cylinders on retention. Even with a slightly negative base, you're set up for a pretty good overall growth. We do see just kind of this macro environment persisting. There's not really any kind of formal outlook on where tariffs are going to take us, on immigration policy, on all these other things that are kind of impacting just that wait-and-see mode that customers are in. A little too early to get specific, but certainly for the foreseeable future, we kind of see that wait-and-see, consistently flat, overarching hiring environment. Yeah, that makes sense.

And again. This is this is something that our competitors. Just don't have we are light years ahead of them and this is a big competitive moat for us.

Super helpful comments, there. Thank you both.

Peter Christiansen: Super helpful comments there. Thank you both.

Thank you I see no further into next year. Thank you all for joining us today and for your participation. This concludes the first advantage third quarter 2025 earnings conference call and webcast. At this time you may now disconnect. Your line have a wonderful day.

Program and as you can see, you know, where we're at on that timeline, you know, we're already we're already above and beyond the original 50 million Target. So we're doing well there and leveraging those as in and many places in the business, but the Scott's earlier point on the Q&A, you know, we're a tech company at heart and tech company Plus data. Um, and we'll continue to invest in ways to grow our databases. And when we give out the, the full year numbers at the end of the, you know, at the end of the year, on the Q4 call, you know, you'll see growth in our ncrf, you'll see, growth in our verified databases and then, you know, it's not just growing the databases, it's leveraging them in as many ways as possible, but that'll continue to be a storyline in, in a way that we, um, improve the quality of our products, include the improve, the quality of our p&l and cash flow. Um, but it's always going to be a part of our story here.

Operator: Thank you. I see no further questions in the queue. Thank you all for joining us today and for your participation. This concludes the First Advantage Q3 2025 earnings conference call and webcast. At this time, you may now disconnect your line. Have a wonderful day.

Scott Staples: Just as a follow-up, going back to kind of the identity market opportunity, and you mentioned mid to high teens market growth rate. I mean, given your position in the screening market and everything, do you think you guys can outgrow that sort of market growth rate over the near to medium term as you sort of bring these solutions into your customer base? Yeah. Well, I mean, I think the short answer is we don't know. Because it's so new. I think we're really well positioned. Our customers can go out and buy point solutions to fix some of this. We're in a really unique position. We feel one of the only that can sit behind the scenes and help them triangulate all of these things into one solution. The discussions with customers have been phenomenal.

1 other thing. I'll add yeah, 1 other thing, I'll add to it is. Um, and and again this kind of ties back to retention. I know, I, I didn't mention this 1 and I got their attention, you know, question earlier, um, but you know, we have literally been automating, you know, internal processes and automating, you know, uh, our apis to data sources, literally, for 10 years now. And for some reason, over the last year, or so, we are starting to get a, you know, a

Scott Staples: Obviously, we're very happy about the wins, the pilots, and the launches that we've done recently. It's just so early. It's hard for us to sit back and quantify that it will be a certain number and a certain growth rate. As I said, when we get into 2026 a little bit and these numbers become clearer and we start looking at win rates in pipeline and start doing some math behind the scenes, we will report that out to you because we know it's an important piece of our growth algorithm. Thanks, guys. Thank you. Once again, if you would like to ask a question, please press star and one on your keypad now. Our next question is coming from Jeff Silver with BMO. Your line is now open. Please go ahead. Thanks so much. I know it's late. I'm just asking.

Teasing accelerated payback on this. So clients are actually feeling our fast turnaround times and and we've also particularly solved some of the sticky data source uh known data source issues in our industry, certain counties, or certain States, or whatever it might be. Um and so when you sit down and do these business reviews with customers and you show them that they're turnaround times, are are coming down and they feel that they're turning around times are coming down because of our investments in Automation. And again, that's all in the First Advantage, back end that we talked about and now Sterling customers, are, are Legacy. Customers are starting to feel this snap too because we're using our fulfillment engine on the back end for them. Um, that helps with customer retention. Um, and, and, you know, that that is just, you know, the power of that is, is is, uh, is showing up in the retention numbers. And um, and again, this is this is something that our competitors just don't have. We are light years ahead of them, that this is

a big competitive mode for us.

Super helpful comments there. Thank you both.

Thank you, I see no further questions in the queue. Thank you all for joining us today. And for your participation, this concludes the First Advantage, third quarter, 2025 earnings conference call and webcast. At this time, you may now disconnect your line have a wonderful day.

Scott Staples: You noted the retention improvement sequentially. I think you cited a few factors that kind of vary in the Q&A. If I had to focus on a few things, why do you think you saw that retention improve, and is that something you think is sustainable? Thanks. Yeah, I think there's a lot that goes into it. I mean, first thing, we're a very, very, very customer-focused, customer-centric, customer-inspired company. We spend a lot of time with our customers, as I mentioned, with our formal business reviews. Those are only the formal ones. We're talking to our customers daily, weekly, monthly. The Collaborate sessions that we talked about in the script have been phenomenally attended. We've got lots, if not most, of our large customers attending these Collaborate events around the world. We're spending a lot of time with our customers.

Scott Staples: I think there's a couple of things that are driving retention. One is we are considered thought leaders in their industry. We pick certain industry verticals to focus on, and we go deep, deep, deep into those so that we know what they're dealing with from a compliance standpoint, from an onboarding standpoint, from a cost pressure standpoint, whatever it might be. We know their industry well. In most cases, we have most of their peers as customers, so we can help them benchmark. We can help them say, okay, here's what the industry is doing, and here's where you're best in class, and here's where there's gaps. Those gaps are great to point out because what that means is upsell, cross-sell opportunity. That's why package density has been such a great driver of growth for us.

Scott Staples: Vertical knowledge, industry expertise is clearly one of the drivers of retention. The other one is tech. I mean, as I mentioned earlier, we're a great tech company. We've got agile pods all around the world, we've got solution engineers. I mean, we're really good at tech. Our products demo really well, which leads to a lot of new logo wins. Customers are very happy with the products. Also, we've really nailed the Sterling integration from a product and platform standpoint. Our vision, our theory from the very beginning of the acquisition was single backend, leveraging all of the great First Advantage automation that's been out there for literally nine, 10 years now. Single backend, but the front ends don't change for the customers. That kept customers from attriting.

Scott Staples: Usually, when you do an M&A, that's the biggest thing that they worry about is, are you going to force migrate me onto a new platform? The answer was no. It was even better than no. It was like, not only are we not going to force migrate you, but you're actually going to get a series of upgrades because we're taking best of breed from both platforms and giving it to the other platform. There were some things that the Sterling platform did really well that are now becoming available to the First Advantage install base. There are some of the things that First Advantage did really well that are now becoming available to the Sterling install base. Those are things that are visible. We're talking about functionality, best of breed user experiences, etc.

Scott Staples: The things that are invisible to them are the things that we're leveraging on that First Advantage backend. It's the First Advantage backend with all that great automation, which is driving faster turnaround times. If you look at our turnaround times, which is a key KPI for our customers, our turnaround times are coming down with customers because of the automation. We're enabling them to onboard faster, and onboarding faster is critical for them, especially in high-volume hires, because they need the people to do the job. I think it's the combination of our vertical expertise and the fact that we actually nailed the technology and the future promises of technology, like how we're rolling out digital ID, how you can integrate your I-9. All that stuff is being eloquently explained to our customers, and I think they like the story. Appreciate the comments. Thanks.

Scott Staples: Thank you. Our next question is coming from Harold Antor with Jefferies. Your line is now open. Please go ahead. Hey, guys. This is Harold Antor on for Stephanie Moore. Just, I guess, real quick one for me. Just, in terms of international growth, I know international growth has needed several quarters of robust growth. If you could just provide any more color, I guess how that's shaped and how the teams have studied. The UK has been a bright spot, even though you've heard that the UK still is, in some areas, still weak. Just, I guess, anything you're doing there. Then, I guess, on your verticals, I think you call out your healthcare trends, but I believe you see some seasonal pickup in transportation. Is a seasonal pickup in transportation in line with what you saw historically, or just anything there that would be helpful.

Scott Staples: Thank you. Yeah, Harold, go ahead, Stephen. Go ahead. You start. Yeah, Harold, on international, I mean, look, we're still seeing the momentum we've seen the last few quarters sustain, if not accelerate a little bit. International was up a little over 11% in total. Again, like the trend we had last quarter, outpacing the consolidated business. You're right, the UK market has been certainly a strong point there, and some of the underlying verticals are still showing some good strength there. There's some government regulation that's also helping us out. Honestly, we saw growth across all three of our international regions. You remember we've had that larger financial services win in Australia. We've had some other go-to-market success over the course of the year as well. Really strong base, really strong upsell, cross-sell, new logo type winning there in international.

Scott Staples: I'll let Scott fill in the verticals, but I think international has been kind of ahead of the curve and continued to show that growth, and that accelerated a little bit in the third quarter. Yeah, Harold, on the verticals you mentioned. Healthcare. I think it's important to note healthcare for us is really four sub-businesses. So it's acute care, think of hospital networks, post-acute care, life sciences, and healthcare staffing. Post-acute care, life sciences, and especially healthcare staffing really did well in the quarter. It was really just the hospital networks, and it's completely 100% tied to what's going on in Washington, DC, with Medicare and Medicaid. It's not like there's less demand for their services. In fact, there's more demand. You've got an aging US population, and you probably know from your own experiences that there's a tremendous demand in healthcare.

Scott Staples: A lot of these smaller, regional, even rural hospital networks are dependent upon Medicare and Medicaid funding. There's a lot of uncertainty in that right now. They've cut back their hiring just because they don't know where their funding is going to come from. Now, healthcare staffers have filled in the gap because they still need the services. I think this is just an aberration. I think this is something that will play out over the next couple of quarters. We'll stabilize. We're very bullish on healthcare because of the aging population, the incredible need for services. Even though it's slightly down, I would say our strategy is actually to double down in this industry because it's going to be a tremendous growth industry long term.

Scott Staples: It's just having a little bit of an aberration right now, and it's completely tied to the smaller and mid-sized hospital networks. It doesn't really affect the larger hospital networks. It affects mostly the nonprofits. Thank you. Our next question is coming from Pete Christensen with CITI. Your line is now open. Please go ahead. Thank you. Good morning. Thanks for squeezing me in here. Nice execution here, some nice trends. Scott, a quick question. I want to double tap on the AI disruption kind of concern, which I think you laid out really well. I think there is a slight nuance to the argument, though, that at least on the fringe and maybe in certain pockets of your base with AI, then maybe those employers can actually in-house some of their onboarding or screening type of duties there. How would you respond to that?

Scott Staples: What's your opinion there? As a quick follow-up, great to see that you combine the databases here. Building up your proprietary database, can you just talk us through how that's delivering on data cost savings? Is there a point of mass criticality where you really could see an inflection in your data cost because of the years that you've built up your proprietary database? Thank you. Yeah, Stephen, I'll take the first part if you take the second part. On the AI disruption, my short answer is no chance. Customers do not want to do this. This is not where they want to spend their engineering dollars and resources, and it's extremely complicated. It's loaded with compliance. There's not a lot that they're going to do internally with AI through the screening process. Now, that's not true with recruiting. I think AI is.

Scott Staples: Fully in play with recruiting, and it's having great results. Using AI-driven recruiting tools in the front end of the recruiting process makes a lot of sense. That only feeds then better information to us. We see AI as a real lift in quality, because AI should improve the intake of data at the very front end of the recruiting process so that when it then comes to us to then run a digital identity, to then kick off a background screen, to then onboard with an I-9, we have better data because AI has helped with the quality of that data. Whether it's a picture capture, whether it's a biometric capture that the AI is doing, whether AI is helping the candidate fill out the application to make sure that they're putting in their address correctly, their name is.

Scott Staples: All instances of their name are captured, first name, middle initial, or last name, and capturing maiden names, all that kind of stuff. It only helps us, but it doesn't infringe any way on our business model. In fact, it's an improvement in quality, which actually also could help with an improvement in turnaround times. The better data we get from an ATS or from an AI-enhanced recruiting engine, it makes our job that much easier. I think with all of the FCRA compliance laws, with all of the unique thousands and thousands of data sources that need to be hit, I don't see customers doing this themselves in any scenario. Yeah. Pete, on your data question, I think there are two things there. One, I mean.

Scott Staples: Leveraging the data assets and resources of the two combined companies has been a core part of our cost-to-sales component of our synergy program. As you can see, where we're at on that timeline, we're already above and beyond the original $50 million target. We're doing well there and leveraging those in many places in the business. To Scott's earlier point on the Q&A, we're a tech company at heart, and tech companies love data. We'll continue to invest in ways to grow our databases. When we give out the full year numbers at the end of the year on the Q4 call, you'll see growth in our NCRFs, you'll see growth in our verified databases. It's not just growing the databases, it's leveraging them in as many ways as possible. That'll continue to be a storyline in a way that we.

Scott Staples: Improve the quality of our products, improve the quality of our P&L, and cash flow. It's always going to be a part of our story here. Pete, one other thing I'll add—yeah, one other thing I'll add to it is, and again, this kind of ties back to retention. I know I didn't mention this when I got the retention question earlier. We have literally been automating internal processes and automating our APIs to data sources literally for 10 years now. For some reason, over the last year or so, we are starting to get amazing accelerated payback on this. Clients are actually feeling our fast turnaround times, and we've also particularly solved some of the sticky data source, known data source issues in our industry—certain counties or certain states, or whatever it might be.

Scott Staples: When you sit down and do these business reviews with customers and you show them that their turnaround times are coming down and they feel that their turnaround times are coming down because of our investments in automation, that's all in the First Advantage backend that we talked about. Now Sterling customers, our legacy customers, are starting to feel this now too because we're using our fulfillment engine on the backend for them. That helps with customer retention. That is just the power of that. It is showing up in the retention numbers. This is something that our competitors just don't have. We are light years ahead of them, and this is a big competitive moat for us. Super helpful comments there. Thank you both. Thank you. I see no further questions in the queue.

Scott Staples: Thank you all for joining us today and for your participation. This concludes the First Advantage third quarter 2025 earnings conference call and webcast. At this time, you may now disconnect your line. Have a wonderful day.