First Advantage(FA) - 2025 Q3 - Quarterly Results

Financial Performance - Revenues for Q3 2025 reached $409.2 million, a significant increase from $199.1 million in Q3 2024, representing a growth of approximately 105.8%[3] - Net income for Q3 2025 was $2.6 million, with a net income margin of 0.6%, compared to a net loss of $8.9 million in Q3 2024[4] - Adjusted EBITDA for Q3 2025 was $118.5 million, yielding an Adjusted EBITDA margin of 29.0%[4] - Revenues for Q3 2025 reached $409,151,000, a significant increase of 105.8% compared to $199,119,000 in Q3 2024[29] - Net income for Q3 2025 was $2,593,000, compared to a net loss of $8,860,000 in Q3 2024, marking a turnaround in profitability[29] - Adjusted Net Income for Q3 2025 reached $52.312 million, up 37.8% from $37.990 million in Q3 2024[35] - Adjusted Diluted Earnings Per Share (Non-GAAP) increased to $0.30 in Q3 2025, compared to $0.26 in Q3 2024, reflecting a 15.4% growth[35] Guidance and Projections - The company refined its full year 2025 guidance, projecting revenues between $1.535 billion and $1.570 billion, and Adjusted EBITDA between $430 million and $440 million[2][8] - Adjusted Net Income for the full year 2025 is expected to be between $170 million and $180 million, with Adjusted Diluted Earnings Per Share projected at $0.98 to $1.02[8] Cash Flow and Expenses - Cash flows from operations for Q3 2025 were $72.4 million, with Adjusted Operating Cash Flows of $80.5 million after accounting for acquisition-related costs[4] - Operating cash flows for Q3 2025 were reported at $72.369 million, compared to $43.490 million in Q3 2024, indicating a 66.5% increase[41] - Adjusted Operating Cash Flow for Q3 2025 was $80.510 million, up from $45.314 million in Q3 2024, representing a 77.5% increase[41] - The company incurred $40,041,000 in interest expense for Q3 2025, compared to $17,191,000 in Q3 2024, reflecting a 133.3% increase[32] Assets and Liabilities - Total current assets increased to $542,432,000 as of September 30, 2025, compared to $475,993,000 at the end of 2024, a growth of 13.9%[27] - Total liabilities decreased to $2,554,865,000 as of September 30, 2025, down from $2,615,854,000 at the end of 2024, a reduction of 2.3%[27] - Cash and cash equivalents rose to $216,848,000 as of September 30, 2025, compared to $168,688,000 at the end of 2024, an increase of 28.5%[27] Acquisition and Integration - The integration of the Sterling acquisition is progressing ahead of schedule, contributing to customer satisfaction and retention[6] - The company incurred approximately $1.4 million in expenses related to the Sterling Acquisition during Q3 2025[38] - Integration and restructuring charges for Q3 2025 included approximately $3.8 million associated with the integration of Sterling[39] Shareholder Information - The company reported a basic net income per share of $0.01 for Q3 2025, compared to a loss of $0.06 per share in Q3 2024[29] - The weighted average number of shares outstanding increased to 173,561,778 in Q3 2025 from 144,096,312 in Q3 2024[29] - The weighted average number of diluted shares outstanding increased to 175,549,342 in Q3 2025 from 144,096,312 in Q3 2024[35] - Share-based compensation for Q3 2025 included approximately $1.9 million related to modifications of vesting terms[37] Operational Highlights - The company reported strong momentum in its retail & e-commerce and transportation & logistics verticals, with international business achieving year-over-year revenue growth for six consecutive quarters[5] - The company emphasizes a strategy focused on increasing market share across targeted verticals and accelerating international growth[6] Taxation - The effective tax rate for Q3 2025 was approximately 25.1%, compared to 23.1% in Q3 2024[40]