August 7, 2025 FORWARD - LOOKING STATEMENTS This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, our operations and financial performance. Forward-looking statements include all statements that are not historical facts. These forward-looking statements relate to matters such as our industry, business strategy, goals, and expectations c ...

Group 1: Earnings Performance - First Advantage reported quarterly earnings of $0.27 per share, exceeding the Zacks Consensus Estimate of $0.24 per share, and up from $0.21 per share a year ago, representing an earnings surprise of +12.50% [1] - The company posted revenues of $390.63 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.31%, compared to year-ago revenues of $184.55 million [2] - Over the last four quarters, First Advantage has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Group 2: Stock Performance and Outlook - First Advantage shares have declined approximately 13.5% since the beginning of the year, while the S&P 500 has gained 7.9% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.28 on revenues of $410.13 million, and for the current fiscal year, it is $0.96 on revenues of $1.54 billion [7] Group 3: Industry Context - The Technology Services industry, to which First Advantage belongs, is currently ranked in the top 38% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

Financial Performance Overview [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) First Advantage reported significant revenue growth in Q2 2025, primarily driven by the acquisition of Sterling Check Corp, with revenues more than doubling to $390.6 million, while GAAP Net Income was minimal at $0.3 million due to substantial acquisition-related expenses, Adjusted EBITDA and Adjusted Diluted EPS showed strong year-over-year growth, reaching $113.9 million and $0.27, respectively Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $390.6 M | $184.5 M | +111.7% | | Net Income | $0.3 M | $1.9 M | -84.2% | | Adjusted EBITDA | $113.9 M | $55.8 M | +104.1% | | Adjusted Diluted EPS | $0.27 | $0.21 | +28.6% | - GAAP Net Income was significantly impacted by **$7.3 million** in expenses and **$41.3 million** in depreciation and amortization related to the Sterling acquisition and integration[5](index=5&type=chunk) - The company generated **$37.3 million** in Cash Flows from Operations, or **$47.7 million** on an adjusted basis after excluding cash costs associated with the Sterling acquisition[5](index=5&type=chunk) [Full Year 2025 Guidance](index=1&type=section&id=Full%20Year%202025%20Guidance) The company reaffirmed its full-year 2025 guidance, signaling confidence in its business outlook and the expected benefits from realized synergies following the Sterling acquisition, with management expecting revenues to be between $1.5 billion and $1.6 billion for the full year Full Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Revenues | $1.5 billion – $1.6 billion | | Adjusted EBITDA | $410 million – $450 million | | Adjusted Net Income | $152 million – $182 million | | Adjusted Diluted EPS | $0.86 – $1.03 | [Management Commentary](index=2&type=section&id=Management%20Commentary) Management expressed satisfaction with the solid Q2 financial performance, achieved despite macroeconomic uncertainties, highlighting the seamless integration of the Sterling acquisition, advancement of the FA 5.0 strategy, and strong momentum in international markets and Digital Identity solutions, alongside improvements to capital structure through credit facility repricing and voluntary debt repayments - CEO Scott Staples highlighted the company's resilient business model, consistent go-to-market execution, and progress on the FA 5.0 strategic priorities, including the Sterling integration[6](index=6&type=chunk) - The company is experiencing strong customer interest in its Digital Identity solutions and continued momentum in international markets[6](index=6&type=chunk) - At its recent Investor Day, the company introduced a long-term projected Adjusted Diluted EPS compound annual growth rate (CAGR) of **19% to 25%**[7](index=7&type=chunk) - CFO Steven Marks noted that the company repriced its credit facility in July, reducing the borrowing rate by **50 basis points**, and has made over **$45 million** in voluntary principal debt repayments year-to-date[8](index=8&type=chunk) Condensed Financial Statements [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, the company's balance sheet showed total assets of $3.87 billion, a slight decrease from year-end 2024, with Goodwill and Intangible Assets remaining significant components at $2.14 billion and $0.93 billion, respectively, while total liabilities stood at $2.57 billion, with long-term debt being the largest component Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $502,846 | $475,993 | | Goodwill & Intangibles, net | $3,068,686 | $3,112,476 | | **Total Assets** | **$3,871,212** | **$3,922,893** | | Total Current Liabilities | $253,391 | $250,688 | | Long-term Debt, net | $2,104,285 | $2,121,289 | | **Total Liabilities** | **$2,572,049** | **$2,615,854** | | **Total Equity** | **$1,299,163** | **$1,307,039** | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the second quarter of 2025, revenues more than doubled to $390.6 million from $184.5 million in the prior-year period, offset by a corresponding increase in operating expenses, particularly Cost of Services and Depreciation & Amortization, with higher interest expense contributing to a near break-even Net Income of $0.3 million, compared to $1.9 million in Q2 2024 Q2 Statement of Operations Summary (in thousands) | Account | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Revenues** | **$390,633** | **$184,546** | | Total Operating Expenses | $352,896 | $174,643 | | **Income from Operations** | **$37,737** | **$9,903** | | Interest Expense, net | $44,785 | $7,353 | | **Net Income** | **$308** | **$1,861** | | **Diluted Net Income Per Share** | **$0.00** | **$0.01** | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, the company generated $56.8 million in net cash from operating activities, a decrease from $70.4 million in the same period of 2024, while net cash used in investing activities increased to $23.8 million, primarily for capitalized software, and financing activities used $21.1 million, driven by debt repayments Six Months Ended June 30 Cash Flow Summary (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $56,816 | $70,372 | | Net Cash used in Investing Activities | ($23,816) | ($13,812) | | Net Cash (used in) provided by Financing Activities | ($21,107) | $213 | | **Increase in Cash** | **$14,862** | **$55,737** | Reconciliation of Non-GAAP Financial Measures [Reconciliation of Net Income to Adjusted EBITDA](index=9&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) The company reconciled its Q2 2025 GAAP Net Income of $0.3 million to a non-GAAP Adjusted EBITDA of $113.9 million, with major adjustments including adding back $61.9 million in depreciation and amortization, $44.8 million in net interest expense, $5.7 million in share-based compensation, and a combined $8.6 million in transaction, integration, and restructuring charges Q2 2025 Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Description | Amount | | :--- | :--- | | Net Income | $308 | | Interest expense, net | $44,785 | | (Benefit) for income taxes | ($7,610) | | Depreciation and amortization | $61,906 | | Share-based compensation | $5,742 | | Transaction & integration charges | $8,561 | | Other adjustments | $254 | | **Adjusted EBITDA** | **$113,946** | - Transaction and integration charges for Q2 2025 included approximately **$2.3 million** and **$3.7 million**, respectively, related to the Sterling acquisition[34](index=34&type=chunk)[35](index=35&type=chunk) [Reconciliation of Net Income to Adjusted Net Income and EPS](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income%20and%20EPS) To arrive at non-GAAP Adjusted Net Income of $47.0 million for Q2 2025, the company adjusted its pre-tax loss by excluding items such as $50.9 million in acquisition-related D&A, share-based compensation, and other charges, then applied an effective tax rate of 25.6%, resulting in an Adjusted Diluted EPS of $0.27, compared to a GAAP Diluted EPS of $0.00 Q2 2025 Reconciliation of GAAP EPS to Adjusted Diluted EPS | Description | Per Share Amount | | :--- | :--- | | **Diluted net income per share (GAAP)** | **$0.00** | | Adjustments (net of tax) | $0.27 | | **Adjusted Diluted Earnings Per Share (Non-GAAP)** | **$0.27** | - The most significant adjustment was for acquisition-related depreciation and amortization, which added **$50.9 million** to pre-tax income, or **$0.29** per share before tax effects[36](index=36&type=chunk)[37](index=37&type=chunk) [Reconciliation of Operating Cash Flow](index=10&type=section&id=Reconciliation%20of%20Operating%20Cash%20Flow) The company presented an Adjusted Operating Cash Flow metric to provide insight into liquidity from core operations, where for Q2 2025, GAAP cash flow from operating activities of $37.3 million was adjusted by adding back $10.3 million in cash costs related to the Sterling acquisition and integration, resulting in an Adjusted Operating Cash Flow of $47.7 million Q2 2025 Reconciliation of Operating Cash Flow (in thousands) | Description | Amount | | :--- | :--- | | Cash flows from operating activities (GAAP) | $37,345 | | Add: Cost paid related to Sterling acquisition | $10,345 | | **Adjusted Operating Cash Flow** | **$47,690** | Other Information [Conference Call and Webcast Information](index=3&type=section&id=Conference%20Call%20and%20Webcast%20Information) First Advantage scheduled a conference call and webcast for 8:30 a.m. ET on August 7, 2025, to discuss the second quarter 2025 financial results with investors and analysts - The company will host a conference call to review its Q2 2025 results on August 7, 2025, at **8:30 a.m. ET**[11](index=11&type=chunk)[12](index=12&type=chunk) [Forward-Looking Statements and Risk Factors](index=3&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) The press release includes forward-looking statements concerning the company's operations and financial performance, cautioning that these statements are subject to numerous risks and uncertainties, including macroeconomic conditions, regulatory changes, data security breaches, and the ability to successfully integrate the Sterling acquisition and realize its expected benefits - The report contains forward-looking statements that are not historical facts and are subject to various risks and uncertainties[14](index=14&type=chunk)[15](index=15&type=chunk) - Key identified risks include negative macroeconomic changes, operating in a highly regulated industry, potential data security breaches, and failure to realize the expected benefits of the Sterling acquisition[15](index=15&type=chunk)[20](index=20&type=chunk) [About First Advantage](index=5&type=section&id=About%20First%20Advantage) First Advantage is a leading global provider of HR technology software and data, with platforms powered by proprietary technology and AI, offering comprehensive employment background screening, digital identity solutions, and verification services to 80,000 organizations in over 200 countries and territories - First Advantage is a leading provider of global software and data in the HR technology industry, serving **80,000 organizations**[25](index=25&type=chunk) - Core services include employment background screening, digital identity solutions, and verification services, enabled by proprietary technology and AI[25](index=25&type=chunk)

Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Diluted Earnings Per Share, and Adjusted Operating Cash Flows are non-GAAP measures. Please see the schedules accompanying this earnings release for a reconciliation of these measures to their most directly comparable respective GAAP measures. Reaffirms Full Year 2025 Guidance Second Quarter 2025 Highlights Reaffirming Full Year 2025 Guidance Reaffirming full year 2025 guidance ranges, including the expected benefits of realized synergie ...

Core Viewpoint - First Advantage Corporation will release its second quarter 2025 financial results on August 7, 2025, prior to an earnings conference call scheduled for 8:30 a.m. ET on the same day [1]. Group 1: Conference Call Details - Participants can join the conference call by dialing 800-445-7795 for domestic calls or 785-424-1699 for international calls, approximately ten minutes before the start time [2]. - The conference call will also be available via a live webcast on the Company's investor relations website, with related presentation materials posted prior to the call [2]. - A replay of the webcast will be accessible on the Company's investor relations website following the conference call [3]. Group 2: Company Overview - First Advantage is a leading provider of global software and data in the HR technology industry, utilizing proprietary technology and AI for its services [4]. - The Company offers comprehensive employment background screening, digital identity solutions, and verification services, serving over 80,000 organizations globally [4]. - Headquartered in Atlanta, Georgia, First Advantage operates in over 200 countries and territories, focusing on modernizing hiring and onboarding processes [4].

Core Viewpoint - First Advantage (FA) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors play a role in this relationship, as they adjust their valuations based on earnings estimates, leading to stock price fluctuations [4]. Business Improvement Indicators - The upgrade in Zacks Rank for First Advantage suggests an improvement in the company's underlying business, which is expected to drive the stock price higher [5][10]. - Over the past three months, the Zacks Consensus Estimate for First Advantage has increased by 3.3%, indicating a positive trend in earnings expectations [8]. Zacks Rank System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7][9]. - First Advantage's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Group 1 - The article discusses the author's previous coverage of First Advantage (FA) and the recommendation of a hold rating due to concerns about the merger with Sterling Check [1] - The author emphasizes a fundamentals-based approach to value investing, focusing on companies with long-term durability and robust balance sheets rather than just low multiples [1] - There is a recognition that investing in successful companies carries risks, particularly regarding valuation, but some situations may justify less concern about price in the short term due to significant growth potential [1]

Core Viewpoint - Fountain Asset Corp. intends to initiate a normal course issuer bid to repurchase its subordinate voting shares, believing they are undervalued at current market prices [1][2]. Company Summary - Fountain Asset Corp. is a merchant bank that provides equity financing, bridge loan services, and strategic financial consulting across various industries, including marijuana, oil & gas, mining, real estate, manufacturing, retail, financial services, and biotechnology [3]. Issuer Bid Details - Upon receiving regulatory approval, Fountain plans to buy back up to 3,216,335 subordinate voting shares, which represents approximately 5% of its currently issued and outstanding shares, over a 12-month period from June 19, 2025, to June 18, 2026 [2]. - The repurchase price will be based on the market price at the time of acquisition, and the actual number and timing of purchases will be determined by the company [2]. - Canaccord Genuity Corp. has been retained to facilitate these purchases on behalf of Fountain [2].

Summary of First Advantage (FA) 2025 Conference Call Company Overview - **Company**: First Advantage - **Industry**: Pre-employment screening and digital identity solutions - **Key Executives**: Scott Staples (CEO), Steven Marks (CFO) [2][3] Core Business Insights - First Advantage is the leading provider in the pre-employment screening market, with a revenue of **$1.5 billion** and **$457 million** in EBITDA [5] - The total addressable market (TAM) for background screening is approximately **$14 billion**, with half currently being serviced and the other half representing growth opportunities, particularly in international markets [6] - The digital identity market has emerged as a new TAM of **$10 billion**, driven by increasing identity fraud risks in recruitment processes [6][7] Market Dynamics - Over **50%** of new clients in the APAC region are first-time screeners, indicating significant growth potential in international markets [6] - Companies are increasingly focused on risk management and brand protection, leading to higher demand for background screening services [6][8] - Gartner predicts that by **2028**, **1 in 4** job candidates will use some form of fraud in their applications [9] Competitive Landscape - First Advantage holds a **25%** market share in a fragmented market with several mid-market players and numerous smaller competitors [10] - The company has a strong technology and vertical integration strategy, allowing for customized solutions tailored to specific industries [12] Technology and Innovation - First Advantage has invested heavily in automation, AI, and proprietary data, spending **$130 million** annually on R&D [17] - The company has developed AI-driven customer service solutions, improving customer satisfaction and operational efficiency [19] Financial Performance - First Advantage has maintained a **96%** customer retention rate and has seen revenue growth through upselling and cross-selling [23][34] - The company aims to achieve **$2 billion** in revenue and **$600 million** in EBITDA by **2028**, with an EPS target of **$1.65 to $2** [32][34] - The company is focused on deleveraging post-acquisition of Sterling, with a target leverage ratio of **2 to 3 times** by the end of next year [30] Strategic Initiatives - The integration of Sterling is a key focus, with expected synergies now estimated between **$65 million to $80 million** [25] - The FA 5.0 strategy emphasizes vertical penetration, technology integration, and financial discipline [41][46] Risk Management - The company operates primarily in resilient sectors such as healthcare, which provides insulation from economic volatility [39][40] - First Advantage's large enterprise clients are better positioned to absorb market fluctuations compared to smaller businesses [38] Conclusion - First Advantage is well-positioned in a growing market with significant opportunities in digital identity and international expansion. The company's focus on technology, customer retention, and strategic acquisitions will drive future growth and profitability [34][60]

Summary of First Advantage FY Conference Call Company Overview - **Company Name**: First Advantage - **Industry**: HR Technology and Background Screening - **Business Model**: Global software, data, and services company focused on HR tech, providing background screening and compliance services in over 200 countries and territories [6][7][8] Key Points and Arguments Business Transformation - First Advantage has transitioned from a background screening company to a comprehensive software, data, and services provider over the past eight years [9] - The company went public on Nasdaq approximately four years ago [9] Acquisition of Sterling - The acquisition of Sterling has positioned First Advantage as the largest player in the background screening space, with a market cap significantly larger than its nearest competitor [10][12] - The rationale for the acquisition included complementary strengths in verticals, enhancing technology platforms, and filling gaps in market coverage [12][13] Competitive Landscape - First Advantage is categorized as a leader in the market, with a competitive moat against mid-sized players and smaller companies [16][17] - The company invests $120 to $130 million annually in R&D, which exceeds the revenue of many smaller competitors [17][18] Market Dynamics - The total addressable market (TAM) for First Advantage has grown from $13 billion to $14 billion, with significant opportunities in the APAC region [28] - Digital identity is emerging as a critical area, with a TAM of $10 billion, driven by increasing fraud in recruitment processes [32] Financial Outlook - First Advantage aims to achieve $1.8 to $2 billion in revenue by 2028, with a consistent growth rate of 7% to 9% expected [38][40] - The company anticipates EBITDA of approximately $600 million by 2028, with a focus on high-quality earnings and free cash flow conversion [41][42] Labor Market Insights - The labor market has stabilized, with a job openings to unemployed ratio returning to a normalized level of 1:1 [49] - The company has maintained a 96% customer retention rate post-acquisition, indicating strong client relationships [39][50] International Growth - Significant growth opportunities exist in the UK, India, and Australia, particularly due to the digitization of data sources in these regions [54][55] - The combined entity of First Advantage and Sterling enhances international business capabilities [57] AI and Technology Integration - First Advantage is leveraging AI and machine learning to improve data processing and customer experience, with dedicated teams focused on innovation [59][61] - The fragmented nature of data in the background screening industry presents opportunities for AI to streamline operations and enhance service delivery [61] Additional Important Insights - The company is focused on integrating the two businesses post-acquisition and achieving cost synergies of $65 to $80 million [46] - Procurement departments are increasingly favoring larger vendors like First Advantage for their technology and risk management capabilities [36][37]