PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) First Advantage reported increased revenues and a widened net loss in Q1 2025, primarily due to the Sterling acquisition and higher interest expenses [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets and liabilities slightly decreased, with goodwill and intangible assets remaining significant components of the balance sheet Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $171,994 | $168,688 | | Goodwill | $2,128,018 | $2,124,528 | | Intangible assets, net | $955,357 | $987,948 | | **Total Assets** | **$3,871,691** | **$3,922,893** | | Long-term debt, net | $2,117,434 | $2,121,289 | | **Total Liabilities** | **$2,592,936** | **$2,615,854** | | **Total Equity** | **$1,278,755** | **$1,307,039** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q1 2025 revenues more than doubled due to the Sterling acquisition, but a significant increase in interest expense led to a widened net loss Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | **Revenues** | **$354,588** | **$169,416** | | Total operating expenses | $346,971 | $170,142 | | Income (Loss) from Operations | $7,617 | $(726) | | Interest expense, net | $46,580 | $3,570 | | **Net Loss** | **$(41,194)** | **$(2,908)** | | Basic and diluted net loss per share | $(0.24) | $(0.02) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities decreased in Q1 2025 due to higher interest payments, while investing and financing activities primarily involved capitalized software and debt repayments Q1 2025 vs Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $19,471 | $38,329 | | Net cash used in investing activities | $(11,076) | $(7,031) | | Net cash (used in) provided by financing activities | $(5,993) | $689 | | **Increase in cash, cash equivalents, and restricted cash** | **$3,308** | **$31,659** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the Sterling acquisition's impact, including significant goodwill, altered debt structure, new segment reporting, and a subsequent debt repayment - The company completed the acquisition of Sterling Check Corp. on October 31, 2024, for a total consideration of approximately **$2.2 billion**, resulting in the recognition of **$1.31 billion in goodwill**[42](index=42&type=chunk)[44](index=44&type=chunk) - In Q1 2024, one customer represented approximately **11% of consolidated revenues**. In Q1 2025, no single customer accounted for **10% or more of revenues**[37](index=37&type=chunk) - The company now reports in three segments: First Advantage Americas, First Advantage International, and the new Sterling segment. For Q1 2025, Sterling contributed **$187.5 million in total revenues** and **$48.4 million in Segment Adjusted EBITDA**[87](index=87&type=chunk)[88](index=88&type=chunk) - Subsequent to quarter end, on May 7, 2025, the company made a voluntary principal repayment of **$15.0 million** on its Amended First Lien Credit Facility[94](index=94&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 revenue growth driven by the Sterling acquisition, offset by existing customer declines, leading to increased expenses and a widened net loss despite Adjusted EBITDA growth [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Q1 2025 revenues significantly increased due to the Sterling acquisition, but higher cost of services, depreciation, and a surge in interest expense led to a substantial net loss Q1 2025 Revenue Change Drivers (in millions) | Driver | Revenue Impact (in millions) | % of 2024 Revenue | | :--- | :--- | :--- | | Sterling Acquisition | +$187.5 | +110.7% | | New Customers | +$5.1 | +3.0% | | Existing Customers (Net Decrease) | -$7.4 | -4.4% | | **Total Increase** | **+$185.2** | **+109.3%** | - Cost of services as a percentage of revenue increased from **51.5% to 54.3%** year-over-year, impacted by Sterling's higher relative cost of services due to its product and customer mix[128](index=128&type=chunk) - Interest expense increased by **$43.0 million (1,204.8%)** due to an incremental **$1.62 billion** in term loan principal related to the Sterling Acquisition financing[135](index=135&type=chunk)[136](index=136&type=chunk) [Key Operating and Financial Metrics (Non-GAAP)](index=31&type=section&id=Key%20Operating%20and%20Financial%20Metrics%20%28Non-GAAP%29) Adjusted EBITDA significantly increased in Q1 2025 due to the Sterling acquisition, though margin compressed, while Adjusted Diluted EPS remained flat despite higher adjusted net income Non-GAAP Financial Metrics (in thousands, except per share data) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Adjusted EBITDA | $92,112 | $46,558 | | Adjusted EBITDA Margin | 26.0% | 27.5% | | Adjusted Net Income | $30,486 | $24,786 | | Adjusted Diluted Earnings Per Share | $0.17 | $0.17 | Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | **Net loss** | **$(41,194)** | **$(2,908)** | | Interest expense, net | 46,580 | 3,570 | | Provision (benefit) for income taxes | 2,231 | (1,388) | | Depreciation and amortization | 61,666 | 29,822 | | Share-based compensation | 7,967 | 4,751 | | Transaction and acquisition-related charges | 3,996 | 11,992 | | Integration, restructuring, and other charges | 10,866 | 719 | | **Adjusted EBITDA** | **$92,112** | **$46,558** | [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company maintained sufficient liquidity with **$172.0 million** in cash and a **$250.0 million** revolving credit facility, supported by a refinanced **$2.185 billion** term loan - As of March 31, 2025, liquidity consisted of **$172.0 million in cash and cash equivalents** and **$250.0 million available** under the revolving credit facility[165](index=165&type=chunk) - In connection with the Sterling Acquisition, the company entered into a new credit agreement with a **$2.185 billion term loan** due 2031 and a **$250.0 million revolving credit facility** due 2029[168](index=168&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that as of March 31, 2025, there have been no material changes in its market risks compared to the disclosures in its 2024 Annual Report - No material change had occurred in the company's market risks as of March 31, 2025, compared with the disclosure in the 2024 Annual Report[180](index=180&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2025, while actively integrating Sterling's operations and control processes - The CEO and CFO concluded that disclosure controls and procedures were effective as of the end of the reporting period[182](index=182&type=chunk) - The company is in the process of integrating the Sterling operations, control processes, and information systems, and has taken steps to monitor and maintain appropriate internal controls during this integration[183](index=183&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course litigation, with an **$11.2 million** liability recorded for probable and estimable losses as of March 31, 2025 - Information regarding legal proceedings is incorporated by reference from Note 12, which states the company has recorded a liability of **$11.2 million** for pending matters as of March 31, 2025[185](index=185&type=chunk)[81](index=81&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors as of March 31, 2025, compared to those disclosed in the 2024 Annual Report - As of March 31, 2025, no material changes had occurred in the company's risk factors compared with the disclosure in its 2024 Annual Report[186](index=186&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[187](index=187&type=chunk) [Other Information](index=38&type=section&id=Item%205.%20Other%20Information) President Joelle Smith adopted a Rule 10b5-1 trading plan on February 28, 2025, for the potential sale of up to **69,402 shares** of common stock - On February 28, 2025, President Joelle Smith adopted a Rule 10b5-1 trading plan for the sale of up to **69,402 shares** of common stock[188](index=188&type=chunk) [Exhibits](index=39&type=section&id=Item%206.%20Exhibits) The report lists various exhibits filed, including the Sterling merger agreement, corporate governance documents, and officer certifications - Exhibits filed include the Agreement and Plan of Merger with Sterling Check Corp., corporate governance documents, and certifications from the Principal Executive Officer and Principal Financial Officer[190](index=190&type=chunk)

Financial Data and Key Metrics Changes - The first quarter revenues were $355 million, nearly flat compared to the previous year on a pro forma basis [22] - Adjusted EBITDA for the first quarter was $92 million, with an adjusted EBITDA margin of 26%, up approximately 200 basis points year-over-year on a pro forma basis [23] - Adjusted diluted EPS was $0.17, flat year-over-year [24] Business Line Data and Key Metrics Changes - Combined upsell, cross-sell, and new logo rates delivered 9.3% growth in the quarter, with retention remaining high at 96% [23][13] - The sales pipeline momentum included 14 enterprise bookings in the first quarter, totaling 78 in the last twelve months, each with $500,000 or more of expected annual contract value [13] - The average deal size increased, indicating strong package density and value selling across most verticals and geographies [13] Market Data and Key Metrics Changes - The transportation vertical showed healthy demand, while there was a slowdown in order volumes within the retail and e-commerce verticals [15][16] - International operations reported an 8% increase, with growth across all regions including EMEA, India, APAC, and Australia [90] Company Strategy and Development Direction - The company is focused on executing its FA five-point-zero strategy, emphasizing customer retention, synergy realization, and integration of the Sterling acquisition [8][9] - The integration process is on track, with a focus on leveraging the best solutions and technologies from both First Advantage and Sterling [18] - The company aims to achieve run rate synergies of $60 million to $70 million within two years post-acquisition [26] Management's Comments on Operating Environment and Future Outlook - Management remains cautious due to macroeconomic uncertainties but has not observed significant changes in fundamental demand drivers [9][11] - The company expects base revenues to remain a growth headwind in Q2 but anticipates sequential improvement later in the year [29][30] - Management is confident in achieving adjusted EBITDA margins around or above 28% starting in Q2, with free cash flow projected between $65 million and $95 million for 2025 [31] Other Important Information - The company has contingency plans in place to manage potential economic slowdowns and is prepared to take actions to reduce costs as needed [11] - The company hosted a record number of attendees at its annual Collaborate User Conference, indicating strong customer engagement [20] Q&A Session Summary Question: Can you elaborate on the cross currents from clients? - Management noted strong order volumes but clients are in a wait-and-see mode regarding forecasting due to macroeconomic conditions [36][38] Question: How is retention trending for the Sterling base? - Retention remains high at 96%, with Sterling customers excited about new features and upgrades [40][42] Question: What gives confidence in the guidance? - Confidence stems from strong new logo generation and upsell/cross-sell revenue, with a focus on maintaining historical retention levels [71] Question: Are you seeing more RFPs post-Sterling? - RFP volumes are normal, driven by trends in the industry, particularly around digital identity [66] Question: How long does onboarding for large deals typically take? - Onboarding for large and complex deals typically takes about six months, with revenue expected to start in late Q2 or early Q3 [68] Question: How is the international business performing? - International operations have shown consistent growth, with an 8% increase, driven by a focus on risk and compliance [90]

Financial Data and Key Metrics Changes - First quarter revenues reached $355 million, nearly flat compared to the previous year on a pro forma basis [22] - Adjusted EBITDA for the first quarter was $92 million, with an adjusted EBITDA margin of 26%, up approximately 200 basis points year-over-year on a pro forma basis [23] - Adjusted diluted EPS was $0.17, flat year-over-year, impacted by increased interest on transaction financing and the dilutive effect of new shares issued for the acquisition [24] Business Line Data and Key Metrics Changes - Combined upsell, cross-sell, and new logo rates delivered 9.3% growth in the quarter, with retention remaining high at 96% [23] - The sales pipeline momentum included 14 enterprise bookings in the first quarter, totaling 78 in the last twelve months, each with $500,000 or more of expected annual contract value [13] - The average deal size increased, indicating strong package density and value selling across most verticals and geographies [13] Market Data and Key Metrics Changes - International operations saw an 8% increase, marking three to four consecutive quarters of growth, with positive momentum across all regions [85] - The transportation vertical experienced healthy demand, while retail and e-commerce showed a slowdown in order volumes [15] - The company noted that 87% of 2024 pro forma revenues were generated in the U.S., with limited direct exposure to U.S. Federal government hiring [10][11] Company Strategy and Development Direction - The company is focused on executing its FA five-point-zero strategy, emphasizing customer retention, synergy realization, and integration of the Sterling acquisition [8][9] - The integration process is on track, with a focus on leveraging the best solutions and technologies from both First Advantage and Sterling [17] - The company aims to reduce net leverage towards approximately three times pro forma adjusted EBITDA within 24 months post-close [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model despite macroeconomic uncertainties, noting that they have not observed sustained changes in demand drivers [9] - The company is prepared with contingency plans to reduce costs if economic conditions worsen [12] - Guidance for the full year 2025 remains reaffirmed, with expectations for base revenues to improve sequentially later in the year [29] Other Important Information - The company actioned an incremental $17 million in run-rate synergies in Q1, bringing the total to $37 million, exceeding synergy goals [24] - The company hosted a record number of attendees at its annual Collaborate User Conference, indicating strong customer engagement [20] - The implementation of AI agents in criminal records processing has improved speed and quality, enhancing customer satisfaction [19] Q&A Session Summary Question: Can you elaborate on the cross currents from clients? - Management acknowledged the unique macroeconomic times and emphasized a conservative outlook while noting strong order volumes and a "just in time" hiring mode among clients [37][38] Question: How is retention trending for Sterling clients? - Retention remains high at 96%, with Sterling customers excited about new features and upgrades, indicating successful communication and integration efforts [40][41] Question: What gives confidence in the guidance? - Confidence stems from strong new logo generation, upsell/cross-sell revenue, and historical retention levels, despite underlying base volume uncertainties [69][70] Question: How is the international business performing? - International business is up 8%, with growth across all regions, driven by a focus on risk and compliance [85][86] Question: What insights have been gained from the Sterling integration? - The integration has been treated as a merger, focusing on adopting the best practices from both companies, leading to a successful and rapid integration process [93][96]

Core Viewpoint - First Advantage reported quarterly earnings of $0.17 per share, exceeding the Zacks Consensus Estimate of $0.13 per share, with a year-over-year comparison showing no change in earnings [1][2] Financial Performance - The company achieved revenues of $354.59 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.51%, and showing a significant increase from $169.42 million in the same quarter last year [2] - Over the last four quarters, First Advantage has exceeded consensus EPS estimates two times and topped revenue estimates twice [2] Stock Performance - First Advantage shares have declined approximately 20.1% since the beginning of the year, contrasting with the S&P 500's decline of 4.3% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.24 on revenues of $382.37 million, and for the current fiscal year, it is $0.92 on revenues of $1.53 billion [7] - The trend of estimate revisions for First Advantage is mixed, which may change following the recent earnings report [6] Industry Context - The Technology Services industry, to which First Advantage belongs, is currently ranked in the top 27% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Performance - Q1 2025 revenues reached $354.588 million[73], a nearly flat year-over-year performance compared to pro forma Q1 2024 revenues of $355.1 million[28] - Adjusted EBITDA for Q1 2025 was $92.112 million[73], resulting in an Adjusted EBITDA Margin of 26%[73] - Adjusted Diluted Earnings Per Share for Q1 2025 remained at $0.17[20, 32], consistent with Q1 2024[32] - Adjusted Operating Cash Flow for Q1 2025 was $33.3 million[23, 43, 47], after adjusting for $13.8 million in cash costs related to the Sterling acquisition and integration[23, 43] Synergies and Cost Management - $37 million in run rate synergies were actioned as of March 31, 2025[37] - The company expects to action a total run rate synergy target of $60 million to $70 million within two years[37] - $12 million in acquisition close-to-date synergies were realized as of March 31, 2025[37] Growth Drivers and Retention - Combined new logo, upsell, and cross-sell contributed 9.3% to revenue growth[34] - Retention remained high at 96%[22, 34] Guidance and Outlook - The company reaffirmed its full-year 2025 guidance, projecting total revenues of $1.5 billion to $1.6 billion[18, 50] - Full-year 2025 Adjusted EBITDA is projected to be $410 million to $450 million, with an Adjusted EBITDA Margin of approximately 27% to 28%[50]

Exhibit 99.1 First Advantage Reports First Quarter 2025 Results Reaffirms Full Year 2025 Guidance First Quarter 2025 Highlights 1 Reaffirming Full Year 2025 Guidance • Reaffirming full year 2025 guidance ranges, including the expected benefits of realized synergies, for Revenues of $1.5 billion to $1.6 billion, Adjusted EBITDA of $410 million to $450 million, Adjusted Net Income of $152 million to $182 million, and Adjusted Diluted Earnings Per Share of $0.86 to $1.03 2 ATLANTA, May 8, 2025 – First Advantag ...

Core Insights - First Advantage Corporation reported strong financial performance in Q1 2025, with revenues of $354.6 million, significantly up from $169.4 million in Q1 2024, indicating a year-over-year growth of approximately 109% [3][4] - The company reaffirmed its full-year 2025 guidance, projecting revenues between $1.5 billion and $1.6 billion, adjusted EBITDA of $410 million to $450 million, adjusted net income of $152 million to $182 million, and adjusted diluted earnings per share of $0.86 to $1.03 [2][10] Financial Performance - Revenues for Q1 2025 were $354.6 million, compared to $169.4 million in Q1 2024, reflecting a 109% increase [3] - Adjusted EBITDA for Q1 2025 was $92.1 million, with an adjusted EBITDA margin of 26.0%, compared to $46.6 million and 27.5% in Q1 2024 [3][6] - The net loss for Q1 2025 was $(41.2) million, resulting in a net loss margin of (11.6)%, which included $15.3 million in acquisition-related expenses [3][6] Strategic Initiatives - The integration of the Sterling acquisition is progressing ahead of schedule, with $37 million in run-rate cost synergies realized, moving towards a target of $60 million to $70 million [5][9] - The company is focusing on customer retention and synergy realization as part of its integration plan [9] Upcoming Events - First Advantage will host its inaugural investor day on May 28, 2025, to discuss its strategic vision, financial growth outlook, and key initiatives [8]

Core Insights - Fountain Asset Corp. announced its financial results for Q4/24 and Fiscal 2024, highlighting a strategic focus on improving financial performance through the disposal of non-core investments and capitalizing on new opportunities [1][4]. Q4/24 Highlights - The net asset value (NAV) increased to $5.51 million ($0.09 per share), a 12.5% increase quarter over quarter [8]. - The company reported a net comprehensive income of $0.35 million, a significant recovery from a net comprehensive loss of $3.63 million in Q4/23 [8]. - Total revenue from investment activity was $0.57 million, compared to a total loss of $3.32 million in Q4/23 [8]. - Net unrealized gains on portfolio investments reached $2.37 million, up from $0.83 million in Q4/23 [8]. - Total expenses decreased to $0.22 million from $0.31 million in Q4/23 [8]. Fiscal 2024 Highlights - The NAV at the end of Fiscal 2024 was $5.51 million ($0.09 per share), down 18% year over year from $6.66 million ($0.11 per share) [8]. - The company recorded net comprehensive losses of $1.30 million, an improvement from losses of $5.26 million in Fiscal 2023 [8]. - Total losses from investment activity were $0.41 million, significantly reduced from $4.40 million in Fiscal 2023 [8]. - Net unrealized gains on portfolio investments were $1.47 million, contrasting with net unrealized losses of $0.03 million in Fiscal 2023 [8]. - Total expenses for the year were $0.89 million, slightly up from $0.86 million in Fiscal 2023 [8].

Core Insights - First Advantage Corporation released its 2025 Global Trends Report, providing insights into the background screening industry based on extensive customer surveys and data analysis [1][2] Company Overview - First Advantage is a leading provider of global software and data in the HR technology sector, serving 80,000 organizations across over 200 countries and territories [2][4] - The company focuses on employment background screening, digital identity solutions, and verification services, leveraging proprietary technology and AI to enhance hiring processes [4] Key Findings from the Report - The report highlights the importance of combining technology and compliance strategies to improve hiring efficiency and candidate experience while ensuring risk mitigation and security [3] - There is a growing demand for faster background screening processes, particularly in the United States, driven by enhanced automation technologies that reduce turnaround times for criminal background checks [5] - Organizations are increasingly prioritizing adherence to global regulatory requirements while streamlining hiring processes, with advanced screening technology facilitating compliance [5] - Identity fraud mitigation solutions are being adopted more widely, with companies focusing on criminal history screening to enhance security amid complex regulatory environments [5] - In the UK, 52% of applicants utilize touchless digital identification in their online applications, and 9% provide a share code to validate their right-to-work status [5]

Core Viewpoint - First Advantage Corporation will release its first quarter 2025 financial results on May 8, 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 800-267-6316 for domestic calls or 203-518-9783 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]. 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 to offer employment background screening, digital identity solutions, and verification services [4]. - The company serves over 80,000 organizations globally, modernizing hiring and onboarding processes across more than 200 countries and territories [4].